Anyone who pays attention can tell you that California employment law changes constantly. So we’re continually updating Doing Business in California: A Guide for Employers. This 15-page guide provides clear summaries of California’s unique requirements for employers. You can download a PDF of the Guide here. If you subscribe to that whole “ounce of prevention” theory, this is a great way to see if your company is complying with California’s overly complicated employment law requirements. On the other hand, if you’re more of the “ignorance is bliss” type, well, good luck in court.

Special thanks to Nancy Yaffe, Tyreen Torner, Sahara Pynes, and Cristina Armstrong for their work on earlier versions of this guide.

A number of new requirements for California settlement and separation agreements took effect on January 1, 2019. Two of them stem from the #MeToo movement. These are:

  • Assembly Bill (AB) 3109 prohibits language in contracts or settlement agreements that bars anyone from testifying in administrative, legislative or judicial proceedings concerning alleged criminal conduct or sexual harassment. I think that those provisions would have been void under prior law, but there’s no doubt that they’re void now.
  • Senate Bill (SB) 820 prohibits non-disclosure provisions in settlement agreements related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. The bill expressly authorizes provisions that (i) preclude the disclosure of the amount paid in settlement and (ii) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. Settlement agreements signed after January 1, 2019 should be reviewed by counsel to ensure compliance with the new restrictions.

A third bill (SB 1431) has received less attention. This bill changes the language of the ubiquitous Civil Code § 1542 waiver. As of January 1, 2019, the language required to waive unknown claims is:

 

“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

It’s not a huge change (adding “or releasing party” and “or released party”). But if you plan to ask anyone to release claims, you should include the current language.

California employers know to expect that the law sometimes takes some crazy turns. But the changes to the rules for healthcare worker meal waivers have been particularly insane. Try to keep up.

  1. In 2000, the legislature enacted AB 60, which included provisions saying that if you worked more than 12 hours, you could not waive a second meal period. The law also gave the Industrial Welfare Commission authority to issue regulations.
  2. The IWC issued amended Wage Orders that same year. Wage Orders 4 (Professional, Technical, Clerical, Mechanical & Similar Occupations) and 5 (Public Housekeeping Industry – which includes hospitals) specifically allow healthcare employees working 12–15 hours to waive a second meal period.
  3. A group of plaintiffs sued their employer arguing that the IWC exceeded its authority and that the Wage Orders were illegal to the extent that they allowed waiver of the second meal period. The case was Jazmina Gerard v. Orange Coast Memorial Medical Center. In that case, the trial judge granted summary judgment for the employer, the employees appealed, and the appellate court reversed. So as of February 2015, employers who had followed the Wage Orders were suddenly subject to class-wide liability going back at least three years.
  4. In October 2015, the state legislature enacted a statute specifically permitting healthcare workers working over 12 hours to waive the second meal period. Still, the litigation continued because it raised questions about how to interpret the law before that enactment.
  5. In March 2017, after being told by the California Supreme Court to take another look, the appellate court reversed itself. It recognized that it was mistaken on the timing and concluded that the IWC acted appropriately.
  6. The California Supreme Court agreed to hear the case. In a decision issued earlier this week, the California Supreme Court agreed that the IWC acted within its rights in issuing the Wage Orders. So we’re back where we started. Healthcare employees working 12-15 hours are allowed (and have been allowed since 2000) to waive a second meal period.

Throughout this process, healthcare workers and their employers both wanted the same thing. Neither benefited from a rule that said that, after working over 12 hours, you couldn’t go home until you took an unpaid, 30-minute meal break. It didn’t need to be this complicated.

The one and only Keith Chrestionson will present a 2019 Employment Law Update for California Employers on January 23, 2019 at 8:30 am in our San Francisco Office (345 California St., Suite 2200, San Francisco, CA 94104). Sure, you can read about the new laws here. But can a blog post provide you both breakfast and refreshments? No, it cannot (but we’re working on that). This is a complimentary program where Keith will not only explain the new laws, but give practical advice on how to implement them and avoid liability. You can get more details here. Space is limited so register now! 

It’s that time of year again. Time for holiday parties, ugly sweaters, and summaries of legal developments.

The #MeToo movement has resulted in a slew of new bills addressing sexual harassment in the workplace. They include:

  • Assembly Bill (AB) 3109 prohibits language in contracts or settlement agreements that bars anyone from testifying in administrative, legislative or judicial proceedings concerning alleged criminal conduct or sexual harassment. I think that those provisions would have been void under prior law.
  • Senate Bill (SB) 820 prohibits non-disclosure provisions in settlement agreements related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. The bill expressly authorizes provisions that (i) preclude the disclosure of the amount paid in settlement and (ii) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. Settlement agreements signed after January 1, 2019 should be reviewed by counsel to ensure compliance with the new restrictions.
  • SB 1300 significantly expands liability under the Fair Employment and Housing Act.  The law lowers the burden of proof to establish harassment and provides stricter guidance on what constitutes “severe or pervasive” conduct that rises to the level of unlawful harassment (e.g. rejecting the “stray remark” doctrine that previously required more than one offensive remark to succeed on a claim).  It expands FEHA protection to any harassment by contractors, rather than just sex harassment.  It bars a prevailing defendant from being awarded attorney’s fees and costs unless the court finds the action was frivolous, unreasonable, or groundless. This bill also prohibits release of claims under FEHA in exchange for a raise or a bonus or as a condition of employment or continued employment, but presumably not in separation agreements.  These changes take effect at the start of the new year and we will monitor interpretations or guidance of these new and expansive provisions.
  • SB 1343 expands the requirements relating to sexual harassment training. Current law requires all employers with 50 or more employees to provide two hours of sexual harassment prevention training only to supervisors. The new law now mandates training for all employers with five or more employees and becomes effective in 2020.
  • The FEHA already protects employees and applicants from harassment in the employment relationship. SB 224 expands that reach to individuals who may not be employers, but hold themselves “out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a 3rd party.” This would potentially include doctors, lawyers, investors, landlords, elected officials, lobbyists, directors, and producers.
  • Defamation laws make certain communications privileged. In other words they cannot support a slander or libel claim unless they’re made with malice. AB 2770 says that those privileged communications include complaints of sexual harassment by an employee to an employer that are made without malice and are based on credible evidence. This bill would also protect employers who (again, without malice) answer questions about whether they would rehire an employee and whether that decision is based on a determination that the former employee engaged in sexual harassment.

Other bills that address sex, gender, and pregnancy discrimination include:

  • AB 1976 deals with lactation accommodation. Employers were already required to provide a reasonable amount of break time to accommodate an employee desiring to express breast milk for her baby and make reasonable efforts to provide a private place for the employee to do so, in close proximity to the employee’s work area, other than a toilet stall. AB 1976 says its not enough that the location is not a toilet stall. Now it can’t be in a bathroom.
  • AB 2282 clears up lingering issues from last year’s ban on salary history inquiries in the interview process. Our own Nancy Yaffe explains it all in this post.
  • While not strictly employment-related, SB 826 requires public companies based in California to have at least one woman on their board of directors by the end of next year. The requirement rises to two female board members by 2021 if the company has five directors, or to three if the company has six or more directors.

There were even some new employment related bills that had nothing whatsoever to do with sex harassment or discrimination.

  • SB 970 requires 20 minutes of classroom or other interactive training regarding human trafficking awareness to hotel and motel employees whom the law deems “likely to interact or come into contact with victims of human trafficking.” This includes any “employee who has reoccurring interactions with the public, including, but not limited to, an employee who works in a reception area, performs housekeeping duties, helps customers in moving their possessions, or drives customers.”
  • AB 2610 creates an exception to the rule that meal periods must begin before the end of the fifth (or in certain conditions sixth) hour for certain drivers transporting nutrients and byproducts from a licensed commercial feed manufacturer to a customer located in a remote rural location.
  • In November California voters approved Proposition 11, which was a reaction to the California Supreme Court’s 2016 decision in Augustus v. ABM Security Services, Inc. As we explained at the time, the decision announced that employees were not “relieved of all duties” for meal and rest breaks if they were required to carry a communications device. Under Proposition 11, the Augustus decision won’t apply to emergency ambulance workers in the private sector. Toni Vranjes wrote an article for the Society of Human Resource Management about Prop 11 in which she interviewed me and other employment lawyers.

What lies ahead? Last April’s California Supreme Court decision in Dynamex Operations West Inc. v. Superior Court threw employers for a loop by announcing a new test for determining independent contractor status. Competing bills seek either to roll back the decision (AB 71) or codify it (AB 5). This is an issue where many workers who appreciate the flexibility of their freelance status have sided with employers in seeking to return to the earlier test.

What else lies ahead? More change, more surprises, more unpredictability. That’s what makes California employment law both aggravating and fascinating.

Fox Rothschild LLP is proud to support the Bay Area Urban Debate League. BAUDL establishes and maintains competitive debate leagues in under-resourced public middle and high schools. BAUDL teaches young people in San Francisco, Oakland, Emeryville, and Richmond to research and advocate positions on complex policy issues. Its participants are overwhelmingly students of color and low income. Our program has a direct, measurable impact. 

If you believe in equality of access to education, if it bothers you that the gap between the “haves and have nots” continues to widen, if you believe that there are young people in the poorest parts of the Bay Area who deserve a chance to succeed (and have much to contribute), please help. You can watch a great short video and donate online here.

Perhaps you’ve noticed a certain amount of incivility in political discourse. You may have even noticed that the current U.S. president has a somewhat polarizing effect. Some people love him. Some people hate him. And many hold those who don’t share their beliefs in contempt.

What if that incivility spreads into the workplace? Can employers get sued if employees feel that they’ve been discriminated against for their political views?

California Labor Code § 1101 prohibits employers from having “any rule, regulation, or policy” (1) forbidding or preventing employees from engaging or participating in politics or running for office; or (2) “controlling or directing, or tending to control or direct the political activities or affiliations of employees.” That statute prohibits employers from taking action against employees for their political activities that don’t directly affect their job performance. So employers in California are not allowed to discriminate based on political activities or affiliations. Employers are, however, allowed to take action when employees’ expression of their political views affects their job performance or that of co-workers.

What if employees claim that their co-workers are creating a hostile work environment because of their political affiliation? “Talia poured coffee on my MAGA hat and it wasn’t an accident!” There the law is less clear. (I’m assuming the employee wasn’t wearing the hat at the time – that would be battery.) Political belief is not a protected category under state and federal discrimination laws. There are plenty of reasons why employers want to prevent abusive behavior in the workplace. But unless the employee is advocating on behalf of a protected group (e.g. arguing that the employer underpays workers of  a particular race) or for employee rights (e.g. seeking to organize workers), I see no law that requires employers to prevent political disagreements at work. In other words, California has yet to recognize a claim for a politically hostile work environment.

One thing that is clear is that employee’s told to refrain from political arguments at work can’t turn to the First Amendment’s guarantee of freedom of speech. That guarantee doesn’t restrict what private (as opposed to government) employers can do.

In the past, we’ve done a Halloween post on whether it’s OK to discriminate against monsters. But this subject is much scarier.

The Bar Association of San Francisco is presenting a seminar: 2018 Disability Employment Law Updates. It will take place on December 11, 2018, from noon to 1:15, at the BASF Conference Center, 301 Battery St., 3rd Floor, San Francisco, CA 94111.

Ben Bien-Kahn of Rosen Bien Galvan & Grunfeld LLP will present the plaintiff’s perspective and I’ll present the defense perspective. The program is approved for 1 hour of of MCLE and is sponsored by the Equality Committee on Disability Rights of the Bar Association of San Francisco.

You can register to attend the event in person or to receive the webcast here. I hope to see you there!

Tyreen Torner has again updated this Chart Summarizing CA State and Local Paid Sick Leave Rules. It summarizes the Paid Sick Leave laws for California, San Francisco, Los Angeles, San Diego, Oakland, Berkeley, Santa Monica, and Emeryville.

Regular readers of this blog may be asking: “Wait. Didn’t she just do an update in June?” Yes, she did! But there have been changes since then in the rules for Santa Monica, San Francisco, and pesky little Emeryville. Keeping this chart current requires constant vigilance, but Tyreen is up to the task.

It’s been nearly six months since the California Supreme Court announced that employers and government agencies were using the wrong test to determine who’s an independent contractor. In Dynamex Operations West, Inc. v. Superior Court, the court declared that employers must meet the three-prong ABC test to overcome the presumption of employment status. But Dynamex left a number of questions unanswered. A decision filed this week,  Garcia v. Border Transportation Group, LLC, takes a tentative initial step to address those open questions.

There, the trial court granted summary judgment for the employer on the basis that Garcia was an independent contractor. Some of those claims (but not all) were based on the IWC Wage Orders, which guarantee employees a minimum wage, maximum hours, overtime compensation, meal and rest breaks, and more. The employee appealed and, while the appeal was pending, the CA Supreme Court issued its opinion in Dynamex.

Since the employer could not show that the plaintiff had an independently established business (part C of the ABC test), the court of appeal reversed the summary judgment on the claims based on the Wage Orders. These included claims for unpaid wages, minimum wage violations, failure to provide meal and rest periods, failure to furnish itemized wage statements, and a claim that the foregoing constituted unfair competition.

The court upheld summary judgment on claims for wrongful termination, waiting time penalties, and an unfair competition claim based on those violations. The court reasoned that, while Dynamex applied to claims based on the Wage Orders, the test for the remaining claims still involved the extent of control the employer exercised over the worker.

In a footnote, the court also questioned whether the Dynamex decision applies retroactively. The parties had not raised the issue and the court therefore said it would not address it. But in declining to address it, the court noted: (1) the general rule that judicial decisions have retroactive effect; (2) that there could be exceptions where the parties reasonably relied on the previously existing law; (3) that the Dynamex court declined a request to apply its ruling only prospectively; and (4) that Dynamex came as no greater surprise than a number of decisions that routinely apply retroactively. That’s quite a bit for an issue the court said it would not address.

While this decision doesn’t hold out much hope for Dynamex not applying retroactively, it at least says that it may be an open question. The greater value for employers comes in the decision’s reinforcement that (at least in this appellate court on this day), Dynamex is limited to claims under the Wage Orders. As to when we’ll have greater clarity on those issues, that remains to be seen.