Parental leave policies are back in the news.  Jones Day, one of the nation’s largest law firms, faces legal action claiming its parental leave policy is discriminatory.  The policy at issue provides 10 weeks of paid parental leave for biological parents (regardless of gender) who seek to be primary caregivers.  In addition, the policy grants biological mothers eight (8) weeks of disability leave.  This policy, on its face, should pass muster given EEOC guidance that biological mothers disabled as the result of childbirth may be given additional leave benefits. However, in the complaint filed yesterday, plaintiffs allege that in practice, the firm gave women 18 weeks of combined leave regardless of whether or not the women were actually disabled. The plaintiff’s contend that the grant of 18 weeks of leave for adoptive parents supports their position that leave was intended as bonding leave rather than disability leave.

This lawsuit underscores the importance of policy and practice being consistent and equal without regard to gender. The plaintiff’s view the firm policy as treating fathers less favorably, rather than accepting the firm’s stated intention of treating disabled mothers more favorably.  Washington D.C., where plaintiffs worked, does not have state disability insurance (SDI).  However, California and other states’ SDI programs presume a six-week disability period for a biological mother delivering vaginally and an eight-week disability period for cesarian delivery.  In light of the SDI presumptions, I don’t think the Jones Day policy was unreasonable in providing all birth mothers with a presumed eight-week disability period.  But, the courts may not agree with me.

You may recall recent settlements based on parental leave policies that were facially discriminatory or disparately impacted fathers, or can remind yourself of those details here.

In light of the nuanced applications and continued media scrutiny on the value of paid parental leave in the workplace, companies should review their written policies and implementation practices to ensure compliance with this changing area of the law.

The complaint also alleges retaliation and gender-based pay disparity.

If you plan to attend the California HR Conference on August 25-29th in Long Beach, I hope you will come hear me speak.  My topic is the ever entertaining Getting Down & Dirty with the Interactive Process.  My session is Monday afternoon (August 26th).  Come and hear the best stories!  I hope to see you there.

Not too late to register.  #CAHR19

The gift that keeps on giving, the California Supreme Court decision in Dynamex Operations West, Inc. v. Superior Court is getting a fresh look to determine whether it applies retroactively.  For the uninitiated, the Dynamex decision upended the legal analysis for determining whether a worker is an employee or an independent contractor.  Since then, Dynamex has continued to evolve and complicate business relationships with workers.

Red balloons on blue sky spelling "Guess"

As if to demonstrate just how complicated things can get, the 9th Circuit has taken it upon itself to flip-flop on the paramount question of whether Dynamex applies retroactively.  On May 2 of this year, the 9th Circuit issued a ruling stating that despite the overhaul of the independent contractor analysis, Dynamex applies retroactively.  Two months later, on July 22, the 9th Circuit withdrew its decision, and advised that it will certify the question to the California Supreme Court.  In other words, the 9th Circuit is saying it jumped the gun, and California should have decided this issue.

Retroactivity is no small matter.  The Dynamex independent contractor test, referred to as the “ABC test,” casts a much larger net than the previously applied test, sweeping in many thousands of workers and classifying them as employees when they would otherwise have been classified as independent contractors.  If the ABC test is applied retroactively, then all of these employees may have a newly-ripened misclassification lawsuit.

Although no California courts have decided the issue of whether Dynamex should be applied retroactively, the infamously employee friendly California courts have primed the issue.  In Garcia v. Border Transportation Group, LLC, the court of appeal stated in a footnote, without deciding the issue, that:  (1) the general rule is that judicial decisions have retroactive effect; (2) there is an exception where the parties reasonably relied on the previously existing law; (3) the Dynamex court declined a request to apply its ruling only prospectively; and (4) that Dynamex came as no greater surprise than other decisions that routinely apply retroactively.  In other words, while retroactivity is an open issue, the courts are leaning towards applying the ABC test retroactively.

While the California Supreme Court mulls over this issue, employers would be prudent to take proactive measures to reduce liability, including by auditing and updating all worker relationships under the new ABC test.  Employers should keep abreast as this issue unfolds (or subscribe to this blog for more updates).

Showing once again its willingness to break new ground in enacting employee protections, California will soon ban discrimination based on certain hairstyles. Senate Bill 188, signed by Governor Newsom on July 3, 2019, expands the definition of “race” in the Fair Employment and Housing Act. Specifically, the following paragraphs will be added to Cal. Gov’t Code § 12926 effective January 1, 2020:

(w) “Race” is inclusive of traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.
(x) “Protective hairstyles” includes, but is not limited to, such hairstyles as braids, locks, and twists.
So what are we talking about here? Certainly Afros and other natural hairstyles are protected. So are braids, which consist of three (or more) intertwined strands of hair. Locks are rope-like strands of hair that can be created in a number of ways, including coiling, braiding, or palm rolling. As for twists, they’re formed by twisting strands of hair and then twisting two twisted strands around one another. Keep in mind, however, that these are only examples. In fact, the definition of “traits historically associated with race” isn’t limited to hairstyles. What else it may include is anyone’s guess.
What should employers do? If you have dress code or grooming policies, make sure that they comply with the new law. More broadly, make sure that your managers understand that they can’t rely on Eurocentric standards of professionalism in deciding who to hire or promote.

Another mid-year reminder:  California hotels and motels must train all employees on human trafficking awareness by January 1, 2020.

Per SB 970, hotel and motel employers must provide:

  • At least 20 minutes of “effective interactive training” about human trafficking awareness;
  • To each employee who is likely to interact or come into contact with victims of human trafficking; and
  • Who is employed as of July 1, 2019.
  • After that, new hires must be trained within six months of hire into a role that is likely to interact or come into contact with victims of human trafficking.
  • No additional training is requirement for employees trained on or before January 1, 2019.

Therefore, it is a good idea to train all of your existing employees this summer, and then have a human trafficking component to your new hire orientation going forward.

Luckily, the Blue Campaign has put together a very helpful and informative Hospitality Toolkit.   It explains how to recognize a victim of human trafficking for employees in different hotel departments:  Housekeeping, F&B, Front Desk, Security, etc.  It also provides directions and resources for what to do if you suspect someone may be a victim (without putting the victim in further danger), and includes department specific postings.

Unfortunately many people, male/female, adults/minors, undocumented migrants/US citizens, can be victims of human trafficking.  The training is designed to expose employees to the issue and provide guidance on how to best assist.

July may seem like a sleepy summer month, but don’t forget — for many cities in California it is the time for minimum wage increases.  Your payroll company may notify you and take care of it, but if you handle payroll directly, then please take note.

As of July 1st, the following cities in Southern California have scheduled increases to $14.25 (for businesses with 26 or more employees) and $13.25 (for employers with 25 or less employees):

  • City of Los Angeles
  • County of Los Angeles (unincorporated areas)
  • Malibu
  • Pasadena
  • Santa Monica

As of July 1st, the following cities in Northern California also have increases:

  • Alameda — $13.50
  • Berkeley — $15.59
  • Emeryville — $16.30 or $15.00 (for small independent restaurants with 20 or fewer locations)
  • Milpitas — $15.00
  • San Francisco — $15.59
  • San Leandro — $14.00

The California Restaurant  Association actually has a handy tracker and map.  Or you can use Tyreen Torner’s excellent chart.

City minimum wage does not change the statutory minimum for exempt status, which must be twice the state’s applicable minimum wage.

Don’t forget to double check those pay rates for your city!

The #MeToo movement started more than a year and a half ago. Somewhat surprisingly, the number of sexual harassment cases filed has not increased significantly. However, we’ve seen significant changes in how those cases get handled and resolved. For one thing, more claims get resolved before litigation gets filed. Employers who want to avoid the negative publicity of a sexual harassment claim have a powerful incentive to settle early. Once employees publicize their accusations, it may be impossible to undo the damage to a company’s reputation.

This is especially true in California, where employers settling a sex harassment case can no longer prevent plaintiffs from disclosing the factual basis for the claim. Before 2019, a settlement would typically require the plaintiffs to refrain from repeating the factual basis for their claims. No employer wanted to settle with the plaintiff and have the plaintiff continue publicizing his or her accusations. That changed with the adoption of California Code of Civil Procedure § 1001. Now, you can keep the settlement amount confidential and, as long as the case is against a private employer, you can keep the claimant’s identity confidential. But plaintiffs can’t agree not to disclose the factual basis for their claims even if they want to. As a result, employers have greater incentive to settle before litigation gets filed, since § 1001 doesn’t yet apply.

Another change is that many employers have stopped requiring employees to arbitrate harassment claims. They often do so in response to public pressure, such as this recent editorial arguing that “Mandatory Arbitration Enables Sexual Harassment.” These efforts to vilify arbitration are unwarranted. Plaintiffs’ employment lawyers have been battling against arbitration forever, largely because they know that jurors are more likely to be swayed by emotion and to see things from the plaintiff’s perspective. An arbitrator who has experience in a particular area of law is every bit as capable of reaching the right conclusion as a jury. And plaintiffs in arbitration are just as capable of publicizing their claims as plaintiffs in court. Arbitration is simply another method of resolving disputes. It no more enables sexual harassment than music enables people to dance poorly.

Some things haven’t changed. One is that prevention has to be a priority. The best way to prevent harassment is to ensure that people know what’s prohibited and where to go if they have concerns. For this reason, California requires most employers to train all of their employees in the state. Second, as I’ve said many times before, harassment litigation is less about what the harasser did than what the company did in response. Employers who learn of harassment in their workplace need to act immediately to address the situation. Often, that requires guidance from experienced counsel. The cost of getting legal advice on how to respond to these issues is a fraction of the cost of litigating these claims.

Father’s Day came early for the class of new dads who settled their gender discrimination lawsuit last week regarding JPMorgan Chase’s parental leave policy. As we discussed here, this lawsuit, and the one against Estee Lauder that settled last year, shed light on the importance of treating new parents equally in the workplace, regardless of their sex. With the topic of parental leave in the news and at the forefront of political debate, there is still no clear answer on how much leave is the right amount or how to transition new parents back into the workplace most effectively. However, the EEOC has made clear that leave policies must offer the same amount of time for new moms and new dads, with a caveat. The policies at issue in both cases involved a “primary” and “secondary” caregiver distinction.  This distinction, of which parental leave advocates are critical, is permitted so long as the employer is not enforcing the policy in a discriminatory manner. For example, a company cannot assume that a woman is the “primary caregiver” or require a new father to prove that he will assume “primary” caregiving responsibilities.  

Of course, new moms who are disabled as the result of giving birth may also be entitled to paid disability benefits either by the state or under a company policy.  The leave is job protected under California’s Pregnancy Disability Leave (PDL), and birth mothers can stack PDL next to their pure parental leave or state Paid Family Leave (PFL). Some companies are going one step further in expanding benefits.  I have seen a handful of employers reconsidering their “Pregnancy Leave” policies too.  In a move toward increasing benefits, some companies have broadened paid disability benefits to cover all disabled employees.  Their rationale, in part, goes something like this: Having a paid pregnancy disability policy, but not paying disability leave for non-pregnancy disabilities adversely impacts women with infertility-related disabilities or other workers with a range of potential disabilities.  If you have an existing parental leave policy or are considering adopting one, make sure to consider the logistics of enforcement and seek counsel on this evolving area of employment law.

 

 

In reading all of the online reviews about the Game of Thrones finale, I was struck by one overarching theme – you just can’t please everyone.  In that regard, it reminded me a lot of employment litigation.  Spoiler alert!

Some fans thought the ending was too clean and tidy, too happy in some respects, with Sansa crowned Queen of the North, Arya heading off to new adventures (and likely a spinoff), Tyrion running things for the new Broken King, and weary Jon Snow finding comfort in his wildling friends and reunited with an earless Ghost.

  • Litigation parallel:  With any litigation, there are lots of skirmishes and battles along the way, but generally one side winds up with a happier ending than the other.  And more often than not, a win isn’t a full win given the costs along the way.

Other fans thought certain plot lines were too contrived, and untethered to the past seven seasons of character development.  For example, Daenerys’ decline into the evil mad queen, and Grey Worm’s plummet into a heartless assassin.

  • Litigation parallel:  Reminds me of how often a  judge, jury, or even opposing counsel focuses on some random bit of evidence or case law, but not the exact evidence or precedent you wanted them to, leading them to a different spin on the outcome from what you intended.  “How did they read my carefully crafted brief and come up with that?” we often wonder.

Still even more fans posted, blogged and tweeted their frustration that the writers were not “getting it right” and had botched the entire last epic season.  Why would Jamie go back to Cersei?  Why on earth was Tyrion being so stupid if he was supposed to be the smartest guy in Westeros?  Why didn’t Cersei just kill all of her enemies when she had the chance and they were all just standing there in front of her?  Why were there still gratuitous brothel scenes for goodness sakes after all of the cries about misogyny in the series?  And why on earth was Rhaegal killed so easily by the Iron Fleet, yet Drogon managed to evade every single scorpion bolt?  Fans were disappointed, so much that many petitioned HBO for a season 8 do-over.

  • Litigation parallel:  Ah, the illusion of control.  In litigation we try to control the court, opposing counsel, the witnesses, and our clients.  But as hard as we try, some (or all) of the above can go rogue.  And as litigators we can plan, but we certainly can’t fully control the outcome.  As I often tell clients, in litigation there is no 100%, even with strong facts I still discount chance of success to 80%.

Game of Thrones was a lot like employment litigation.  Lots of unpredictable twists and turns.  A good result for some, but not all.  Often a high price for what you get.  Limited emotional satisfaction, even when you ultimately prevail.

One could sum up the Game of Thrones ultimate theme as:  There must be a better way than endless war and male heirs with birthrights.  But the suggestion from Tarly that the people choose a leader was met with hearty guffaws from the elite leaders.  Sure sounds like parties in litigation to me.  Give up my sense of right and wrong to compromise for the greater good?  No way!

I guess that’s why litigation is here to stay.  But don’t kid yourself, the ending will likely be less satisfying than you think.

The California Consumer Privacy Act (CCPA), a broad-based law protecting information that identifies California residents, was passed in June 2018 and will take effect in 2020. Dubbed “GDPR Lite,” to denote its similarities to the EU General Data Protection Regulation (GDPR), it is expected to be a game-changer for U.S.-based companies that process sensitive data. With detailed disclosure requirements, a grant of extensive rights to individuals to control how their personal information is used, statutory fines and a private right of action, the law requires companies to rethink their data processing practices.

But does the CCPA apply to you?

CCPA applies to you if you fall within either A or B, below:

A.    (1) You are a for-profit business.

(2) You collect California consumers’ personal information (or such information is collected on your behalf) and determine the purposes and means of processing California consumers’ personal information.

(3) You do business in the state of California.

and

(4) You meet one of the following criteria:

(a) You have at least $25 million in annual gross revenues.

(b) You buy, sell, share and/or receive the personal information of at least 50,000 California consumers, households or devices, per year.

(c) You derive at least 50 percent of your annual revenue from selling California consumers’ personal information.

OR

B. You control or are controlled by an entity that meets the above criteria and share common branding with that entity.

Let’s break that down.

Section A:

1. You are a “for profit” business

CCPA applies to companies that are “organized or operated for the profit or financial benefit of [their] shareholders or other holders.”

Nonprofits are not required to comply with the CCPA. However, if you are a nonprofit organization that controls or is controlled by a for-profit entity that qualifies as a “business” and share common branding with, or receive personal information from a business via a “sale,” you could be subject to CCPA.

2. You collect and determine the purpose and means of processing personal information of Californians

You meet this prong if:

  • You receive, buy, rent or access information (including personal information collected passively, i.e. through cookies); and
  • Determine the purpose and means of processing of information that both:
    • identifies, relates to, describes, is capable of being associated with or could reasonably be linked, directly or indirectly, with a particular consumer or household; and
    • pertains to an individual who is (1) in California for other than a temporary purpose, or (2) domiciled in California, but outside the state for a temporary purpose

3. You do business in the state of California – even if you have no physical presence in California

This phrase is not defined in CCPA. It has, under California tax laws, been deemed to apply, in certain cases, to companies doing business online without any physical presence in California.

So, in the absence of guidance from the California Attorney General, it is likely that this will include you if:

  • Your headquarters is in California.
  • You have employees in California.
  • You are an entity incorporated in California or an entity required to register in California as a “foreign entity” under existing California corporate and tax law. Per a recent amendment, starting April 1, 2019, companies not registered in California, with no physical presence in California, are required to register with the California Department of Tax and Fee Administration (CDTFA), collect the California use tax and pay the tax to the CDTFA based on the amount of sales into California if their sales exceed a certain dollar threshold or they have more than 200 separate transactions.
  • You have ties to the state including, in some cases, repeated sales into the state and ownership of real property in the state.

4. You meet one of the following thresholds

  • You have at least $25 million in annual gross revenues. [Note: It is unclear at this point whether the $25 million threshold will operate at the group level and whether revenue not derived from California will count, but the general thought is that this threshold applies to overall revenues, not just revenues from California.]
  • You buy, sell, share, and/or receive (alone or in combination with others) the personal information of at least 50,000 California consumers, households or devices, per year.
    [Note: To reach this threshold, 137 unique visits to your website a day suffices.]
    [Further note: CCPA does not explicitly require that a household be physically located in California or a device be owned by a California resident. Given that CCPA was enacted to protect the right to privacy spelled out in the California Constitution (see above) and such right is bestowed on California residents, such requirement may in the future be read into the statute.]
  • At least 50 percent of your annual revenue comes from selling California consumers’ personal information.

OR

Section B: You control or are controlled by a business

CCPA would also apply to you if you control or are controlled by an entity that meets the above criteria and share common branding with that entity. Therefore, CCPA applies to entities that do business in California and those that are part of the corporate group (parents or subsidiaries) of an entity that does business in California.

B+ You may indirectly be in scope if your B2B clients say so

In order to comply with obligations under CCPA, businesses that are subject to the law will need to ensure that their third party service providers use information in a way that allows the business to be compliant (e.g. delete the information when requested, use the information only as permitted). Therefore, you could be required to comply with CCPA provisions indirectly, through an agreement with your customer.

Finally: Can CCPA apply to me if I am not a consumer facing business (B2C)?  Yes.

Despite its “Consumer Privacy Act” title, as currently drafted, CCPA applies to any business that meets the criteria listed in question one above, even if it does not deal directly with consumers. The definition of “consumer” is also very broad and includes any individual who is (1) in California for other than a temporary purpose, or (2) domiciled in California but is outside the state for a temporary purpose.

It is not yet clear whether the CCPA applies to B2B companies with respect to business contacts who meet the criteria listed in question one and/or employees who are California residents. While the current language of the CCPA and definition of “consumer” appear to include employees and business contacts, the California State Assembly recently proposed AB-25, a bill that would exclude employees, contractors and agents from the definition of “consumer.” Specifically, the bill excludes a natural person whose personal information has been collected by a business in the course of a person acting as a job applicant to, an employee of, a contractor of or an agent on behalf of the business, to the extent the person’s personal information is collected and used solely for purposes compatible with the context of that person’s role as a job applicant, employee, contractor or agent of the business. The bill awaits final legislative action.


Odia Kagan is a Partner at Fox Rothschild and chair of the firm’s GDPR Compliance and International Privacy Practice. Odia leverages her experience counseling companies on GDPR compliance issues to assist companies on the road to CCPA compliance. For assistance, contact Odia at okagan@foxrothschild.com or 215.444.7313.

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