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.

I am looking forward to the California HR Conference sponsored by PIHRA (Southern California’s SHRM) coming up on August 29-31st in Long Beach.  If you haven’t registered, take a look at the three day list of speakers and networking events.

2016 California HR Conference

I will be speaking on the Top 10 Trending Issues for California HR on Monday, August 29th at 1:30 pm.  The session will provide a fast paced summary of the hottest issues facing HR professionals in California, including essential and practical tips for compliance.  I will cover many of the issues we have blogged about here, including the Fair Pay Act, joint employment, independent contractors, wage-and-hour trends, local minimum wage ordinances, PAGA considerations, and more.  If you attend, you will get an overview of the key legal issues facing California HR professionals in one session.

I hope to see you there!

Many people are saying that this California Employment Law Blog doesn’t spend enough time discussing Mississippi law. Well today that’s going to change.

On August 8, 2016, the Fifth Circuit Court of Appeals overturned a decision saying that a company can fire an at-will employee for having a firearm in his truck in the company parking lot. In Swindol v. Aurora Flight Sciences Corporation, the employer had a rule against bringing a firearm onto company property. When it learned that Swindol had a firearm locked in his truck in the company lot, it terminated his employment.

Swindol sued for wrongful termination relying on section 45-9-55 of the Mississippi Code. That statute generally prohibits employers from having a policy or rule that “has the effect of prohibiting a person from transporting or storing a firearm in a locked vehicle ….” So the court ruled that, under Mississippi law, terminating an at-wil employee for having a gun in his car is unlawful.

Copyright: fxquadro / 123RF Stock Photo
Copyright: fxquadro / 123RF Stock Photo

How does this affect California employers? It doesn’t! We have no such statute here. If an employer wants to prohibit employees from having guns in their cars on company property, it may do so. If an employee breaks that rule, the employer can discipline the person, including termination in appropriate situations. Or, you can transfer them to Mississippi. Take your pick.

Every morning, while enjoying my Starbucks and settling in to the day, I take a peek at the labor & employment dailies to see what’s happening in the exciting world of employment law…Clearly, I need to get out more, but I digress. This morning, my jaw dropped at the verdict, settlement and demand numbers published.  It’s not just employees of Fortune 500 companies seeking the big bucks, but also small professional services firms, hospitality companies, franchisees and non-profits that are being hit…hard. A survey I found identified 43% of small business owners as involved in a law suit or threatened law suit.

20217218 - red lifebelt with dollar sign isolated on white background

It’s even more upsetting when I get calls weekly from small business owners being threatened with legal action who try to do the right thing, but just can’t figure out how to navigate the craziness of California employment regulations. So, while the budget for compliance may be non-existent, there are a few key preventative and low-cost tactics you can take to minimize risk and ultimately, costs of litigation:

1) Review your pay stubs.  Take a few sample stubs from the past two years and ensure they include all the requirements so you can minimize PAGA claims.

2) Implement three essential employment documents, a handbook, confidentiality agreement and arbitration agreement.

3) Address employee complaints as they arise.  Frequently, an employee will complain to a manager or small business owner but the demands of running the day-to-day business prevent timely investigation and resolution of these complaints. Sometimes, complaining employees just need to be heard and treated respectfully to avoid pent up frustration and subsequent legal action.

4) Consider a wage & hour audit.  Have an expert take a look at your overtime practices, payment on termination and employee classifications so you can fix problems before they become law suits.

5) If you worry that a decision could lead to litigation, run it by an attorney. Sometimes a brief conversation will enable you to avoid mistakes that could cost you a great deal of time and money.

Since its launch earlier this month, the Pokémon GO app has become the #1 downloaded app and the most searched term on Google.  With as many as 25 million users in the U.S. alone, it has become a bigger distraction than Twitter or Facebook and Forbes says 70% of users admit to playing at work. While I admittedly downloaded the app in my office, I did so purely for professional research.  And while I haven’t noticed any users in my office, here are some issues to watch out for in your workplace:

59371671 - tambov, russian federation - july 13, 2016 person hand starting pokemon go application on apple iphone5s. studio shot.

-There have been dozens of reported injuries (and crimes) suffered by users in California.  Employees injured while using the app at work may qualify for workers compensation coverage or even disability accommodations.

-While its doubtful the CA legislature contemplated such, injuries sustained playing Pokemon Go would qualify for CA paid sick leave.

-Employers who foster use of the app as team-building may also be liable for injuries that may occur off-site in an effort to “Catch ‘Em All”.

-Because users have to keep the app open while playing, focus is easily diverted with pings and pop-ups, so employers may want to consider productivity contests or perks to counter the effects of the app.

-Remind employees of confidentiality policies. Because smartphone cameras are utilized during the game, employees may be inadvertently transmitting confidential information.

-Consider restricting use of the app on Company-provided cell phones to limit distractions and potential liability from injuries.

-Be sure to apply any discipline in a non-discriminatory manner to avoid complaints of favoritism or discrimination.

A welcome summer distraction for some and an annoying media barrage for others, employers are hoping Pokémon GO(es) away by Labor Day!

Bridgeport Continuing Education will be hosting a seminar titled: “Wrongful Termination, Harassment and Discrimination Claims” on July 29, 2016 in San Francisco. I will be speaking about Litigating and Defending Discrimination Claims, along with Jocelyn Burton. The program offers 5 hours of Mandatory Continuing Legal Education. You can get details and register here.

I hope to see you there!

Copyright: carlosphotos / 123RF Stock Photo
Copyright: carlosphotos / 123RF Stock Photo

The City of Los Angeles is not making it easy for employers operating within city limits.  First, they rushed through an ordinance implementing new paid sick leave requirements on an urgency basis that became effective July 1st.  And now, they have issued rules and regulations explaining the statute that quite frankly, are partially nonsensical, and leave employers in quite a bind to figure out how to comply.

Stomach ache and sick leave
Copyright: chrisfromparis / 123RF Stock Photo

One troubling issue is that although the ordinance allows employers to either accrue sick leave or front load it, the main benefit of the front load method is diminished.  Under current California law, when an employee front loads 24 hours of sick leave, they don’t have to carry over any days from year to year.  That significantly eases the administrative burden.  One would assume the same applied for Los Angeles sick leave, and that 48 hours could simply be front loaded, and not carried over.  In fact, the language of the ordinance only references carry over as to accrued sick leave.  “Accrued unused paid sick leave shall carry over to the following year of employment and may be capped at 72 hours.”  Yet, the regulations contradict that language, and provide that the 72 hour cap applies whether you front load or accrue.  According to the regulations, even if you front load 48 hours, and only allow 48 hours of use per year, there will still be more time on the books that is not available for use (and would need to be reinstated if the employee leaves and comes back within a year).  Plus, good luck trying to explain to an employee why the paystub says 72 hours, but they can only use 48 (even if your policy is clear on that point).

Another problematic issue is the potential for abuse given the inability to discipline for use of 48 hours of sick time.  The Los Angeles regulations state that an employer can’t deny the request to use sick leave if the “Employee communicates the request more than one (1) hour before the beginning of the Employee’s shift in a manner consistent with the Employers’ normal method of communication.”  But what if the Employer’s policy requires a 2-hour call in?  Apparently that can’t be enforced.  And what about the California law requirement that foreseeable needs for sick leave (like a planned medical appointment) need to be communicated ahead of time with “reasonable advance notification”?  Can that still be enforced in Los Angeles?  Maybe not.  And while you can ask for a doctor’s note, you can only do so after three consecutive days of sick leave.  Oh yes, and you can’t ask in a way that “deters” an employee from taking “a legitimate sick day.”

Finally, good luck with figuring out how much sick time accrues if your employees travel in and out of city boundaries.  There are three pages of regulations on that issue alone.  Suffice it to say, you have to have a method to track how much time someone works in the city, even if it is just driving through the city on the freeway!  No joke.  It’s in the regulations.

Pass the antacids.  If you do business in Los Angeles, you are going to need them (and a good lawyer or HR consultant to help you navigate these requirements).