With briefs due next week, we anxiously await the California Supreme Court’s review of the de minimus doctrine.  Under the doctrine, employers are not obligated to pay employees for small increments of off-the-clock time spent preparing for or ending a shift, provided such time amounted to approximately 10 minutes or less of work.

12350701 - blue clock face, close upWhile we wait to hear the CA Supreme Court’s take on this, it’s worth noting that even under the FLSA, courts nationwide have had varied results on what constitutes non-compensable time under the de minimus doctrine. Many of the recent cases involve minimal time spent checking e-mails or texts that are work related. And while courts employ a fact-specific analysis of employment policies and practices, the following factors will weigh against a finding that the time is de minimus:

  1. If the time is a regular and necessary component of the work day or work week;
  2. Employer compulsion to complete the tasks at issue; and
  3. If the time can be recorded easily for payroll purposes

 My colleague Mark Tabakman spoke about this topic today and offered the following advice to employers:

-Consider eliminating or limiting access to work-related email and systems for non-exempt workers during non-work hours

-Develop a comprehensive policy requiring non-exempt employees to record their after-hours time with a clear process for reporting such time

-Train managers on how and when to communicate with non-exempt staff after hours

-Pay for after-hours work performed, while utilizing disciplinary measures if the after-hours work was unauthorized

Until we have more consistent application from the courts, this issue continues to be a ticking time bomb for employers.

One of my least favorite phrases in blogging is “repurposing content.” The verb “repurposing” hurts my ears. You can give something a purpose, but you’re not “purposing” it. And if “purposing” isn’t a verb, how did “repurposing” become one?

While I hate the term, I love the concept. We’ve posted to this blog over 550 times since 2009. Every one of those posts was not completely unique in all respects. Take, for example, my posts about the pros and cons of mandatory workplace arbitration. I posted about that last year. Shortly thereafter, the California Business Law Reporter asked to publish a version of the post. Then last month, Cal CEB asked me to do a guest post for their CEB Blog on the topic. I then posted here about doing the guest post for CEB. So while I may complain about the term “repurposing content,” I’ve repurposed the heck out of that content.

If writing blog posts is as easy as taking something you’ve done before and putting a new spin on it, why has it been 25 days since my last post? (It’s OK to admit that you”be missed me. I’ve missed you, too!) My absence is due to the fact that I’ve been preparing for trial. The case was supposed to start trial today and we were ready to go. Witnesses lined up, pretrial motions filed, opening statement rehearsed, testimony outlined, exhibits organized, I mean ready. Then we show up at court at 8:30 this morning and the judge tells us he’s in the middle of another trial and to come back in January.

Copyright: antoniodiaz / 123RF Stock Photo
Copyright: antoniodiaz / 123RF Stock Photo

So as that date approaches, we’ll need to meet with witnesses again, refamiliarize ourselves with the extensive documentation, and gear up once more. This brings me to the actual point of this post. That would be a rare event in a case going to arbitration, but it’s perfectly normal in trials. You get ready, show up for trial, learn you’re not getting out, and come back months later. It’s hugely inefficient and expensive for the client. Therefore, we can add that to the list of “pros” of workplace arbitration – the hearings tend to start when they’re supposed to start.

In case you’re wondering, I do not see myself repurposing this particular content. I’m more likely to use it as an egregious example of burying the lede.

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. [Update: He signed SB 1241.]

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

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

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.

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.

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

As we’ve blogged about before, many cities in California have increased their minimum wage effective July 1st.  July 1st has come and gone, and just when you think that it is impossible to have another local minimum wage ordinance to keep in mind (given how many there are already), San Diego announced its new minimum wage last Monday.  Here is a handy chart to help you keep track of all these increases (well, until the next minimum wage increase that is).

City Minimum Wage Rate
El Cerrito $11.60/hour
Emeryville $13/hour (55 or fewer employees); $14.82/hour (56 or more employees)
Los Angeles $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
Los Angeles County $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
Pasadena $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
San Diego $10.50/hour
San Francisco $13/hour
Santa Monica $10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017
Sunnyvale $11/hour

 

Exempt Employees

When we talk about minimum wage, we usually think of non-managerial hourly workers. We sometimes forget that there are minimum wage requirements for exempt employees in the “white collar” exemptions (executive, administrative, and professional employees) as well.  Those requirements are known as minimum salary thresholds under state and federal standards.  The current minimum salary threshold in California is $41,600, twice the state’s current minimum wage of $10 per hour. But effective December 1, 2016, the new minimum salary threshold will be $47,476 under the new Federal Overtime Rule.  In order to be exempt under the “white collar” exemptions, those employees must be paid at least $47,476 by December 1, 2016.

When determining exempt status, employers look at requirements such as whether the employee manages the business, exercises discretion and independent judgment, or whether (s)he has a special state license, and stop there. However, employers often forget to make sure that those employees are paid the minimum salary threshold.  Failing this requirement means that the employee is NOT exempt from overtime provisions, even if (s)he would otherwise be exempt.  In that case, employers will be liable for unpaid overtime, meal and rest breaks, failure to furnish itemized wage statements (Labor Code Sec. 226), and other Labor Code violations.

With the upcoming new minimum salary threshold, now is the time to review your pay policies for both exempt and non-exempt employees. Make sure non-exempt employees are paid minimum wage as set forth above, and that exempt employees are paid a salary of at least $47,476 to best guard against costly litigation.

I have been waiting for a gap in my practice with no pending claims about a layoff gone wrong.  Honestly, I have been waiting for over two years, and there has been no gap, so I am taking the plunge and writing this blog post now.

Why are there so many claims involving layoffs?  Because employers consistently think that having a legitimate business reason for a layoff is enough to avoid and ultimately win a legal claim.  Well, sorry to be the bearer of bad news.  It isn’t enough to have a good reason (even if it is the real reason) — you have to be in a position to prove it.

So, how do you prove that your layoff is legitimate?  Here are some tips:

  • First, have someone vet the decision to test whether it passes the “smell test.”  That person can be Human Resources, internal legal counsel, or outside counsel, but someone really has to dig into the facts and make sure that the proposed business justification is legitimate.  And by the way, digging into the facts is not just asking the manager; it is making sure that the manager’s reasons are complete and all risk factors are appropriately identified and considered.  I often ask clients:  “What do you expect the employee to say when you inform her of the layoff?” and “How will you answer that question?”
  • Second, document the reasons for the decision at the time the decision is made.  This becomes very important when the decision makers have left the company and taken the thought process behind the business justifications along with them.
  • Third, make sure all layoff documentation clearly states the legitimate business reason.  No subterfuge here.  Don’t say one thing in the layoff meeting and something else on the separation notice for goodness sakes.  Have a script and make sure everyone sticks to it.
  • Fourth, while performance often weighs into a layoff decision, remember this is not a performance based termination.  So, if there is good reason for termination (such as consistent poor performance, policy violations, or bad behavior) document that behavior and call the separation what it is – a termination, not a layoff.  I have been known to say “a pig in a prom dress is still a pig.”
A pig in a prom dress is still a pig
Copyright: niknikpo / 123RF Stock Photo
  • Fifth, always (and I mean every time) show the individual a list of open positions at the company, and ask if they are qualified for and interested in any of them.  I don’t care if the positions are for janitorial in San Diego and the person laid off is a manager in San Francisco, show the list.  If they indicate interest, explore that option.  If they decline, document that the position list was provided and they declined.  If you don’t want to do this, then refer back to tip #4 (and this is probably not a layoff and should be a performance based termination).
  • Finally, be kind and empathetic.  It stinks to be laid off.  It hurts to have to leave the office without notice.  Treat the person laid off as you would want to be treated (or how you would want your closest family member to be treated).  Period.  No exceptions.

Employers who follow this six simple steps will be well positioned to defend a layoff claim.  If not, well, more business for us lawyers.