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Good News Employers – There are Now Some Answers to Your Questions About the Recent Law Prohibiting Use of Prior Salary History

Posted in Employee Privacy Rights, Employment Contracts and Agreements, Labor Law, New Legislation and Regulations, Wage & Hour

On July 18, 2018, Governor Brown signed Assembly Bill (AB) 2282 which provides answers and clarifications to a number of questions employers had about the new law that went into effect in January 2018 (Assembly Bill 168 – codified in Labor Code section 432.3).  Section 432.3 prohibits employers from relying on the salary history information of an applicant for employment as a factor in determining whether to offer an applicant employment or what salary to offer an applicant, and also requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment.

Since its enactment, employers were questioning the scope of the restrictions contained in Section 432.3, and their obligations in connection with disclosing pay scale information upon request.  In order to answer some of those questions, AB 2282 does the following:

  1. It clarifies that the prohibitions under Section 432.3 do not apply when evaluating the salary of a current employee (e.g. if internal applications or employee promotions are being considered). Specifically, AB 2282 provides that: “For purposes of this section, the term “applicant” or “applicant for employment” means an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.”
  2. In connection with an applicant’s right to seek the pay scale for a position upon reasonable request, AB 2282 defines the two terms as follows:

– “For purposes of this section, “pay scale” means a salary or hourly wage range.”

-“For purposes of this section “reasonable request” means a request made after an applicant has completed an initial interview with the employer.

Based on these definitions, employers now only have to provide a range of what the salary or hourly wage would be for a position rather than some fixed or guaranteed pay scale.  Further, employers only have to provide this information to an applicant once he or she has completed an initial interview with the employer.

  1. Finally, Section 432.3 already provides that nothing in the section prohibits an applicant from voluntarily and without prompting disclosing salary history information to a prospective employer. However, the law was silent on whether an employer could ask an applicant about his or her salary expectations.

AB 2282 clarified that the law does not prohibit an employer from asking an applicant for his or her salary expectations. Specifically, AB 2282 states: “Nothing in this section shall prohibit an employer from asking an applicant about his or her salary expectation for the position being applied for.

Takeaway:  While AB 2282 provided some much needed clarification to the new law, employers must still be sure that anyone involved in the hiring process is aware of the restrictions contained in Section 432.3 in connection with an applicant’s prior salary history.  The employment attorneys at Weintraub Tobin regularly counsel employers in all areas of employment law compliance, including wage and hour and equal pay issues.  Feel free to contact us if we can be of assistance.

California Law Now Provides an Express Statutory Privilege Against Defamation Claims by Those Accused of Sexual Harassment

Posted in Harassment, Labor Law, New Legislation and Regulations, Retaliation and Wrongful Termination

Under California law, an aggrieved person can bring a claim for defamation if the person is the subject of a false and unprivileged statement that is injurious to his/her reputation.  Defamation can take the form of libel or slander.  (Ca. Civ. Code Sec. 44.) Specifically “libel” is defined as a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation. (Ca. Civ. Code Sec. 45.).  Whereas, “slander” is defined as a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which: (a) charges any person with crime, or with having been indicted, convicted, or punished for crime; (b) imputes in him the present existence of an infectious, contagious, or loathsome disease; (c) tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits; (d) imputes to him impotence or a want of chastity; or (e) which, by  natural consequence, causes actual damage. (Ca. Civ. Code Sec. 46.) 

In recent years, a number of defamation lawsuits have been filed by individuals who have been accused of sexual harassment in the workplace in which the individuals claim that the accusations are false and injurious to their reputations.  The concern of the California Legislature was that these defamation claims were having a chilling effect on victims of sexual harassment who may be afraid to come forward with their complaints.  In response to the #MeToo and #WeSaidEnough movements demanding action to address the ongoing prevalence of sexual harassment, the California Senate Judiciary Committee, in conjunction with the Senate Select Committee on Women, Work and Families, held informational hearings in early 2018. In addition to reexamining the legal standards for sexual harassment in California, the hearings also addressed the issue of defamation claims being filed against victims of sexual harassment, and/or against employers and other witnesses involved in a sexual harassment investigation.  As a result, legislation was introduced to modify defamation laws to help mitigate against this chilling effect.

On July 9, 2018, Governor Brown signed Assembly Bill (AB) 2770 which amends California Civil Code section 47 (re: privileged communications). The Senate Judiciary Committee’s June 16, 2018 analysis of the bill explains that AB 2770 codifies California defamation case law as it relates to allegations of workplace sexual harassment.  Thus, the bill amends Civil Code section 47 to expressly provide that: (1) employees who report sexual harassment to their employer are not liable for any resulting injury to the alleged harasser’s reputation, so long as the communication is made based on credible evidence and without malice; (2) communications between employers and anyone with an interest in a sexual harassment complaint, such as victims and witnesses, are not liable for any resulting damage to the alleged harassers reputation, as long as the communication is made without malice; and (3) former employers are not liable for any resulting injury to a former employee’s reputation if, in response to inquiries from prospective employers, the former employers indicate that they would not rehire the former employee based on a determination that the former employee engaged in sexual harassment, so long as the statement is made without malice.

For purposes of defamation law, “malice” is defined as a defamatory publication that is either motivated by hatred or ill will towards the plaintiff, or where the defendant lacked reasonable grounds for believing the truth of the publication and therefore acted in reckless disregard of the plaintiff’s rights. (Schep v. Capitol One N.A. (2017) 12 Cal.App.5th 1331; Taus v. Loftus (2007) 40 Cal 4th 683; see also California Civil Instructions (CACI) 1723).)

This change in the law will become effective January 1, 2019.

NLRB Provides Guidance Regarding Permissible Policies – Are Your Policies Compliant?

Posted in Employee Privacy Rights, Employment Contracts and Agreements, Labor Law, New Legislation and Regulations, Retaliation and Wrongful Termination

Back in December, Beth West informed our readers that the NLRB had issued new (and more realistic) guidelines for evaluating whether employment policies and rules violate the National Labor Relations Act (“NLRA”). As a reminder, the NLRB issued a new two-prong test for determining if facially neutral employment policies could interfere with the exercise of NLRA rights, evaluating: (1) the nature and extent of the potential impact on NLRA rights, and (2) the legitimate justifications associated with the rule. A full analysis of the case can be found here.

The National Labor Relations Board’s General Counsel recently issued a memorandum (the “Memo”) providing guidance as to how the NLRB will enforce workplace policies, in light of that decision. The Memo evaluates common workplace rules to assess whether or not such rules may be permissible, evaluating the rules under three main categories: (1) lawful to maintain; (2) warrant individualized scrutiny; and (3) unlawful to maintain.

Category 1: Rules that are Generally Lawful to Maintain.

According to the Memo, the “types of rules in this category are generally lawful, either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.” The following rules were identified as being “generally lawful to maintain”:

  • Civility Rules
  • No-photography/No-recording Rules
  • Rules against insubordination, non-competition, or on-the-job conduct that adversely affects operations
  • Disruptive Behavior Rules
  • Rules protecting confidential, proprietary, and customer information or documents
  • Rules against defamation or misrepresentation
  • Rules against using employer logos or intellectual property
  • Rules requiring authorization to speak on the employer’s behalf
  • Rules banning disloyalty, nepotism, or self-enrichment

Category 2: Rules that Warrant Individualized Scrutiny.

Category 2 rules are explained as rules that “are not obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications.” It lists possible examples of Category 2 rules to be:

  • Broad conflict of interest rules that do not specifically target fraud and self-enrichment and do not restrict membership in, or voting for, a union
  • Confidentiality rules referring to “employer business” or “employer information” (as opposed to prohibiting use of customer or proprietary information
  • Rules relating to an employee’s use of the employer’s name (as opposed to use of the employer’s logo/trademark)
  • Rules generally restricting an employee’s ability to generally speak to the media or third parties (as opposed to prohibiting speaking on behalf of the employer)
  • Rules banning off-duty conduct that might harm the employer (as opposed to activity that causes a disruption in the workplace)
  • Rules against making false or inaccurate statements (as opposed to defamatory statements)

Category 3: Rules that are Unlawful to Maintain.

The Memo states that “Rules in this category are generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule.” It specifically notes that (1) confidentiality rules specifically regarding wages, benefits, or working conditions; or (2) rules against joining outside organizations or voting on matters concerning the employer are prohibited.

Employers should review their employment policies to ensure compliance with this updated guidance. Weintraub’s Labor & Employment attorneys have extensive experience counseling and auditing employee handbooks. Please contact any member of our team for assistance in updating your policies.

Do You Own a Hotel? – New Regulations Going Into Effect

Posted in Labor Law, New Legislation and Regulations

In January, the Cal/OSHA Standards Board (OSHSB) adopted new regulations intended to prevent and reduce workplace injuries suffered by housekeepers in the hotel and hospitality industry. The new regulations, which go into effect on July 1st, require California hotel (and other lodging) employers to adopt a Musculoskeletal Injury Prevention Program (MIPP) to complement the Injury and Illness Prevention Plan (IIPP), which should already be in place. The MIPP must include:

  • Procedures to identify and evaluate housekeeping hazards through worksite evaluations.
  • Procedures to investigate musculoskeletal injuries.
  • Methods to correct identified hazards.
  • Training of employees and supervisors on safe practices and controls (both, upon hire and annually thereafter).
  • Record retention and a process for reporting injuries to the employer.

If you need help drafting a compliant MIPP, the attorneys in Weintraub Tobin’s Labor and Employment Group are happy to assist you. Contact any one of us for help.

New California Regulations on National Origin Going Into Effect

Posted in Discrimination, Harassment, Labor Law, New Legislation and Regulations, Retaliation and Wrongful Termination

As any reader of our blog knows, California employers are prohibited from discriminating on the basis of national origin (among other classifications). The Fair Employment and Housing Commission (“FEHC”) recently issued new regulations, which go into effect on July 1, 2018, expanding the definition of “national origin” to include an individual’s or ancestors’ actual or perceived (1) physical, cultural, or linguistic characteristics associated with a national origin group; (2) marriage to persons of a national origin group; (3) tribal affiliation; (4) membership in an organization identified with or seeking to promote the interests of a national origin group; (5) attendance in schools or religious institutions typically used by persons of a national origin group; and (6) name associated with a national origin group. The regulations also provide that “national origin groups” include “ethnic groups, geographic places of origin, and countries that are not presently in existence.”

These new regulations further specify the following:

  1. Employers may not have an “English-only rule” unless they are able to demonstrate the following three elements: (1) that the rule is a business necessity; (2) that the rule is narrowly tailored; and (3) that the rule was effectively explained to employees. In order to be considered a “business necessity,” the employer must establish: (1) that the language restriction is necessary to the safe and efficient operation of the business; (2) that the language restriction effectively fulfills the business purpose it is supposed to serve; and (3) that there is no alternative practice to the language restriction that would accomplish the business purpose equally well with a lesser discriminatory impact. Further, while the FEHC clearly establishes that some English-only rules may be permissible, it clarifies that such rules “are never lawful during an employee’s non-work time.” This means that English-only rules are never permissible during meal or rest breaks, or other unpaid employer-sponsored events.
  2. Employers may not question an employee’s immigration status “unless the person seeking discovery or making the inquiry has shown by clear and convincing evidence that such inquiry is necessary to comply with federal immigration law.”
  3. Employers may not have height and weight requirements that disparately impact a certain national origin group. Where an employee is able to show that a height and/or weight requirement does adversely impact a particular national origin, the requirement will be considered unlawful unless the employer can establish the requirement is job related and justified by business necessity, and its purpose cannot be achieved through other means.

If you employ more than five employees in California, you should review your employment policies to ensure compliance with these new regulations. Specifically, employers should ensure that any English-only language restrictions, and or height and weight requirements, comply with these new regulations, and are supported by legitimate business needs.

Still have questions? The attorneys in Weintraub Tobin’s Labor and Employment Group assist employers in all areas of employment law compliance.  Contact any one of us if we can be of assistance.

San Francisco’s New Rules for Enforcing its Paid Sick Leave Ordinance

Posted in Labor Law, New Legislation and Regulations, Wage & Hour

On May 7, 2018, the San Francisco Office of Labor Standards Enforcement (OLSE) published 14 new rules for interpreting the San Francisco Paid Sick Leave Ordinance (“PSLO”). The PSLO was amended on January 1, 2017.  The new rules take effect on June 7, 2018.

We’ve summarized the 5 rules that our clients most frequently ask about:

Rule 1 – Employee Notification of Need for Leave

The rule clarifies that employers may establish policies or procedures dictating how employees need to give notice of a need for leave.

1.1:  Policies requiring advance notice for pre-scheduled absences (like a doctor’s appointment) are generally presumed reasonable.  But, rules requiring excessive amounts of time for advance notice, or especially burdensome methods of communicating the notice, might not be reasonable.

1.2:  Policies requiring notice “as soon as practicable” for an unforeseeable absence will be presumed reasonable. But, policies requiring more than two (2) hours’ notice for an unscheduled absence are not reasonable.  Employers may define “as soon as practicable” as two hours, or less than two hours, prior to the start of an employee’s work shift.  Employers must recognize that there are instances such as accidents or sudden illnesses for which such a requirement is unreasonable.

1.5:  Employers cannot require that employees use magic words (“PSLO” or “paid sick leave”) when giving notice of an absence. If an employee says “I’m out sick” that is all the notice needed.

Takeaway: Employers’ “notice” policies should provide for more than one method of notice if feasible (i.e., call, email or text message to the manager) that allows the employee some flexibility and ease of providing notice.  Employers should also allow someone else to give notice on the employee’s behalf if the employee is incapacitated. Policies should specify that “whenever possible”, employees give up to two hours’ advance notice and note that in an emergency, employees should give notice as soon as practicable. Continue Reading

GOOD NEWS EMPLOYERS – The U.S. Supreme Court Says You Can Require Class Action Waivers In Your Arbitration Agreements

Posted in Employment Contracts and Agreements, Labor Law, Wage & Hour

On May 21, 2018, the United States Supreme Court issued its much anticipated decision in Epic Systems Corp. v. Lewis.  In a 5-4 decision written by the newest jurist, Justice Gorsuch, the Court declares that employers can require employees to arbitrate their employment disputes individually and waive their rights to resolve those disputes through class or collective actions.

Background.

The case was a consolidation of three cases (Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc.).  In each case, the employees brought a class action under the federal Fair Labor Standards Act (“FLSA”) and related state law against their employer on behalf of themselves and similarly situated employees for wage and hour violations. However, in each of the cases, the employees had entered into an agreement with their employer providing for individualized arbitration proceedings to resolve employment disputes between the parties. Although the Federal Arbitration Act (“FAA”) generally requires courts to enforce arbitration agreements as written, the employees argued that the FAA’s “savings clause” removes this obligation if an arbitration agreement violates some other federal law and that, by requiring individualized proceedings, the agreements they signed violated the National Labor Relations Act (“NLRA”).

Each of the employers countered that the FAA protects agreements requiring arbitration from judicial interference and that neither the FAA’s saving clause nor the NLRA demands a different conclusion.  After a detailed analysis, the U.S. Supreme Court agreed.

Court’s Analysis.

The FAA’s Savings Clause Recognizes Only General Contract Defenses Which the Employees Did Not Raise.

The employees argued that the FAA’s savings clause permits courts to refrain from enforcing arbitration agreements if the agreements violate some other federal law, like the NLRA.  However, the Supreme Court held that the FAA’s savings clause —which allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract,” recognizes only “‘generally applicable contract defenses, such as fraud, duress, or unconscionability,’” (citing AT&T Mobility LLC v. Concepcion, 563 U. S. 333, 339), not defenses targeting arbitration either by name or by more subtle methods, such as by “interfer[ing] with fundamental attributes of arbitration.” (Id. at 344.) (emphasis added.)

The Court held that “this is where the employees’ argument stumbles” because they didn’t argue that their arbitration agreements were extracted, say, by an act of fraud or duress or in some other unconscionable way that would render any contract unenforceable. Instead, they object to their agreements precisely because they require individualized arbitration proceedings instead of class or collective ones. And by attacking (only) the individualized nature of the arbitration proceedings, the employees’ argument seeks to interfere with one of arbitration’s fundamental attributes. Continue Reading

The California Supreme Court Makes It More Difficult to Classify Workers as Independent Contractors – Assumes all Workers are Employees

Posted in Employment Contracts and Agreements, Labor Law, New Legislation and Regulations, Wage & Hour

On April 30, 2018, the California Supreme Court applied an expansive definition of independent contractor in a ruling that is sure to have a dramatic impact on many California businesses, and the burgeoning gig economy in particular.

In the case of Dynamex Operations W. v. Superior L.A. County, a class action was brought on behalf of a group of delivery drivers who were classified as independent contractors by delivery company, Dynamex. Dynamex argued that the drivers were properly designated as independent contracts under the totality-of-the-circumstances standard set forth in the Borello case—utilized by California businesses since 1989—which concentrated primarily on the degree of control the employer exercised over the worker. Dynamex’s drivers provided their own vehicles, paid their own transportation expenses (fuel, tolls, vehicle maintenance, and insurance), set their own schedules, and were generally free to choose the sequence in which they made deliveries and the routes they would take. They were also allowed to simultaneously work for other delivery companies.  

The Supreme Court sided with the drivers, concluding that a worker is presumed to be an employee unless the company can establish that each of three factors exist under the “ABC” test: (A) that the worker is sufficiently free from the control and direction of the company; and (B) that the worker performs work that is outside the usual course of the company’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

The Court said it wasn’t enough that Dynamex didn’t prevent the drivers from engaging in other work; it had to prove that the drivers actually performed delivery services for other companies. In addition, Dynamex was a “delivery company,” so its delivery drivers were performing the essential functions of the business. They were not comparable in that regard to an electrician or plumber who might do business with Dynamex as independent contractors.

This ruling, with its newly drawn legal parameters, is expected to significantly affect California’s freelance industry and gig economy. Businesses offering web-based food delivery services, courier and ridesharing services that are based on independent contractor workforces will likely be the most impacted. But this landmark ruling warrants an analysis across the board of many positions that were previously classified as independent contractors.

Are You Doing it Right? California Supreme Court Clarifies Overtime Rate Calculations

Posted in Labor Law, Wage & Hour

It is an old joke that the world can be divided into people who are good at math and those who go to law school.  Whether you believe the joke or not, math – or in this case, simple arithmetic – can be at the heart of many wage and hour questions.  On March 5, 2018, the California Supreme Court issued an opinion in Alvarado v. Dart Container Corp.  The Court articulated a rule on how an employee’s overtime pay rate should be calculated when the employee has earned a flat sum bonus during a single pay period.  Please be aware of the emphasized language:  flat sum bonus.

The Supreme Court’s decision in Alvarado details the procedure for applying a “flat sum bonus” in determining the regular rate of pay for purposes of overtime.  The “regular rate of pay” is the pay rate which is multiplied by the applicable overtime premium (time and a half or double time).   The Court relies heavily on the Department of Labor Standards Enforcement (“DLSE”) Enforcement Manual.  That manual divides the world of regular rate calculations involving bonus and incentive payments into two categories:  (1) those that are “production or commission based;” and (2) those that are paid as a flat sum.  In Alvarado, the flat sum bonus was an attendance bonus paid by the employer to employees who met the company’s attendance incentive goals.  

The question was how are these non-hourly rate wages properly included in calculation of the regular rate.  The DLSE Enforcement Manual outlines acceptable approaches for including such bonus and incentive payments into the regular rate calculation.  Simply put, the law requires periodic bonus commission payments earned in a particular pay period be included in the determination of the “regular rate of pay” prior to calculating the overtime premium payment.  These sums are added to the regularly earned wages and then divided by a divisor to determine the “regular rate of pay.”  The question considered by the Alvarado Court is to what that divisor should be.  As the Court put it:

Specifically, we consider whether the divisor for purposes of calculating the per-hour value of the bonus should be (1) the number of hours the employee actually worked during the pay period, including overtime hours; (2) the number of nonovertime hours the employee worked during the pay period; or (3) the number of nonovertime hours that exist in the pay period, regardless of the number of hours the employee actually worked.

The Court concluded that the divisor should be the second of these options.  That is, dividing the flat sum bonus received in the pay period by the number of non-overtime hours the employee worked during the pay period.

The case did not consider how production based or non “flat sum” bonuses should be included in calculation of the regular rate of pay. The Court’s rationale in Alvarado, however, lends credence to the methods of calculation outlined in the DLSE Enforcement Manual at section 49.2.1.2. :

Compute the regular rate by dividing the total earnings for the week, including earnings during overtime hours, by the total hours worked during the week, including the overtime hours.

News you can use summary:

What this means is that if employees receive a flat sum bonus – one not tied to productive activity or sales activity (such as commissions) the total earnings for the pay period are divided by the total hours of regular work in the week (excluding overtime).  A different rule applies for production bonus workers or commission workers which requires that all wages for the pay period be divided by the total hours worked during the pay period, including overtime hours.

Medical Cannabis Users May Soon be Protected Under FEHA – AB 2069

Posted in Employee Privacy Rights, Employment Contracts and Agreements, Labor Law, New Legislation and Regulations, Retaliation and Wrongful Termination, Wage & Hour

Assembly Bill (“AB”) 2069 was introduced by the California Assembly on February 7, 2018. Currently, California employers can deny employment or impose discipline on cannabis users, regardless of whether such use is for medical purposes. AB 2069 would amend the Fair Employment and Housing Act (“FEHA”) to make it an unlawful practice for an employer to take adverse action against an applicant or employee because of a positive drug test for cannabis (by a medical cannabis card holder) or because of one’s status as a medical cannabis card holder.

Employers would be permitted to take corrective action against employees who are impaired on employer premises because of medical cannabis use. Cannabis can be detected days or even weeks following consumption depending on the duration and frequency of use. As such, there is no empirical way to pinpoint how recently the employee used the drug. Thus, in order to take corrective action against an employee using medical cannabis, the employer would have to have a clear indication that the employee was in fact impaired on the employer premises at a specific point in time. Employers would also be permitted to deny employment to a medical cannabis card holder “if hiring the individual or failing to discharge the employee would cause the employer to lose a monetary or licensing-related benefit under federal law or regulations.” AB 2069 would not protect recreational cannabis users. Therefore, employers could still take corrective action against employees who test positive for cannabis use that do not hold a medical cannabis card.

AB 2069 is currently pending in the California State Legislature. If the bill is successful, it will affect California employer’s drug testing policies and policies for how California employers treat applicants and employees who test positive for cannabis use. California employers should keep an eye out as this bill progresses through the legislature and be ready to consult legal counsel to revise policies regarding medical cannabis use should the bill get signed into law. If you would like to track the bill click here.