California Peculiarities Employment Law Blog

Cal/OSHA Considers Changes to Its Policy on “Repeat” Violations — With Significant Implications for Employers

Posted in Dealing with CA Agencies

By Joshua M. Henderson

Consider this not-so-hypothetical example.  An employer in California receives a citation from Cal/OSHA for a relatively minor safety violation involving no employee injuries.  Maybe the citation was for inadequate training on a particular workplace hazard.  The citation carries with it a penalty of $500.  The employer could appeal the citation, and spend perhaps thousands of dollars to challenge the citation through a hearing before an Administrative Law Judge; or, it could write a check for $500, agree to fix the violation, and be done with it.  In this light, the former response may seem extravagant, while the latter response could be seen as a rational business decision.  

Now, fast forward two years from the date that the employer spent $500 to make that previous violation go away.  The employer abated the prior violation by adequately training its employees shortly after paying the penalty.  A newly-hired employee, however, failed to receive training on the same workplace hazard and suffered a serious injury when exposed to the hazard.  After its investigation, the Division of Occupational Safety and Health (the investigative and prosecutorial arm of Cal/OSHA) cites the employer for a “repeat” violation.  A “repeat” violation carries with it a significant increase in penalties: that $500 penalty now transforms into a serious, repeat violation  with a penalty of up to $36,000.  If the untrained employee had been killed, the employer would face a repeat penalty amount of up to $50,000, and the employer (and the responsible managers) would face potential criminal liability.

This is not a fanciful scenario.  Under Cal/OSHA, employers are required to have an Injury and Illness Prevention Program (IIPP) in place to identify and respond to particular hazards in a workplace.  In addition, the IIPP regulation mandates that employers train their employees on the hazards in the workplace.  Yet, employers may be lulled into settling a Cal/OSHA citation by a short-term cost-benefit analysis of a particular citation and its accompanying penalties.  But, except perhaps where an employer is in financial distress, the penalties should not be an employer’s chief concern.  Instead, the focus should be on answering these questions: Continue Reading

Wait — If I Want To Appeal, I Have To Come Up With How Much How Fast?

Posted in Dealing with CA Agencies

While the Stakes At Issue In Actions Before the DLSE Continue to Grow, So Do The Deterrents And Obstacles to Pursuing Appeals of DLSE Orders in Court

By John R. Giovannone

Last week, the DLSE dropped a bomb.  On April 3, 2014 the California Division of Labor Standards Enforcement (“DLSE”) issued a News Release on its website with the tag line “California Labor Commissioner orders Southern California Company to return over $336,000 to janitorial workers for unpaid wages.”  The order, which also imposed over $33,000 in penalty assessments, addressed claims of wage and meal/rest break violations on behalf of roughly 115 hourly workers over a three year period.  Setting aside the merits of the action, a liability finding of that magnitude in court would ordinarily result in the employer running to appeal.  But, the chances of an appeal are considerably lower here because the liability finding was issued by the DLSE.     

Why don’t more employers appeal adverse DLSE Decisions?  Historically, employers facing adverse orders, decisions, or awards of from the DLSE wouldn’t appeal those decisions in court for reasons that have little to do with the merits of their would-be de novo appeal, such as: Continue Reading

Let’s Play Two: California Supreme Court Hears Oral Argument in Two Important Class Action Cases

Posted in Case Update

Recently, one of our colleagues, Jim Harris, attended the oral argument in Iskanian v. CLS Transportation of Los Angeles, LLC.  The California Supreme Court’s decision, expected by July 3, 2014, will have significant consequences for employers who use or are contemplating using mandatory arbitration agreements with class action waivers.   The result could be that the Gentry case is going the way of the dinosaurs, while PAGA hangs on like a bird of prey.  Jim’s post starts below and continues on Seyfarth’s national Wage/Hour Blog, where you can finish reading it and find other newsworthy items.

The California Supreme Court heard oral argument in two important cases involving employment-related class actions.  From the tenor of and comments made at the argument, it appears likely that the ultimate results will be a mixed bag for employers. 

The first case, Iskanian v. CLS Transportation of Los Angeles, LLC, presents related questions regarding the impact on California practice of the decision in Concepcion, where the High Court overruled a California Supreme Court decision under which class action waivers in certain arbitration agreements were deemed unconscionable.  The threshold issue in Iskanian is whether another California Supreme Court decision, Gentry, also must fall under Concepcion. Continue reading here

Dealing with CA Agencies Blog Series – DFEH 2.0: How to Deal with the Rebooted DFEH

Posted in Dealing with CA Agencies

This week’s post is the first in a four-part blog series entitled Dealing with California Agencies.  Here, we highlight recent developments at the California Department of Fair Employment and Housing (“DFEH”). 

DFEH 2.0: How to Deal with the Rebooted DFEH

By Kristina Launey and Courtney Bohl

The DFEH recently received an “update” to its authority to enforce the California Fair Employment and Housing Act (“FEHA”).  As we previously reported, effective January 1, 2013, the Fair Employment and Housing Commission was eliminated, as well as its ability to adjudicate claims.  Instead, the DFEH is now authorized to file cases directly in court, seek damages, and to collect attorneys’ fees and costs.  The DFEH has made very clear it intends to use every “byte” of its  authority to prosecute suspected and “systemic” violators, and seek fees, costs, and damages.  

Employers beware.  The DFEH’s promise to flex its newly-found muscle brings an increased need to tread cautiously with the DFEH.  Below is a brief look into the “new and improved” DFEH as well as few tips to help employers deal with DFEH 2.0.

The Background:

The DFEH’s new authority came on the heels of two game changing decisions – Wal-Mart Stores, Inc. v. Dukes (which we blogged about here and here) and DFEH v. LSAC (which we blogged about here and here).  

Emboldened by the LSAC decision, the DFEH has expressed an intention to file class actions challenging systemic discrimination under the FEHA.  To help it carry out its mission, it upgraded its systems to include: Continue Reading

Hold Onto Your Hats: Here Comes the 2014 Edition of Cal-Peculiarities!

Posted in 2014 Cal-Peculiarities

As loyal Cal Pecs Blog readers, you probably know of our signature book Cal-Peculiarities:  How California Employment Law Is Different, which we update on an annual basis.  The 2014 edition will be ready for release next week.

This edition is the most comprehensive to date.  It highlights the most recent court decisions and legislative developments for private employers who do business in California.

The 2014 edition will be available in a convenient, searchable eBook format as well as paper.  Look for Seyfarth Shaw’s announcement in your Inbox on March 31.

Navigating San Francisco City Ordinances

Posted in San Francisco Ordinances

By Soo Cho and Michele Haydel Gehrke

Ah, San Francisco — the Bridge! Golden Gate Park! The chocolate! The fog! . . . the ordinances!?  In recent years, our favorite City by the Bay has adopted a number of employee-friendly ordinances that can catch the unwary employer.  In addition to the new “Ban the Box” Ordinance discussed here, San Francisco has a number of additional city ordinances regulating employers.  These ordinances include the Family Friendly Workplace Ordinance; the Paid Sick Leave Ordinance; the Health Care Security Ordinance; and the Minimum Wage Ordinance.  Navigating these ordinances can be tricky not only for employers located in San Francisco, but for employers who have employees who spend more than 8 hours a week working in San Francisco.

San Francisco Family Friendly Workplace Ordinance

As mentioned in previous Cal-Pecs blogs, here and here, effective January 1, 2014 San Francisco has implemented a new Family Friendly Workplace Ordinance.  This ordinance allows employees to request flexible or predictable work arrangements to allow the employee to assist with caregiving responsibilities for a child, a family member with a serious health condition, or a parent age 65 or older.

This ordinance applies to employers who regularly employ 20 or more employees, regardless of location.  Employees are covered if they have been employed for six months and regularly work at least 8 hours per week in San Francisco.  Employees may request accommodations such as a reduced schedule, a change in scheduled work times, working from home or telecommuting. Continue Reading

The Not-So-Wild West: Practical Tips for California Investigations

Posted in Workplace Investigation

By Ann Marie Zaletel, Jamie Chanin, and Andrew Crane

It is important that employers across the country conduct proper investigations into workplace complaints.  But these investigations are especially critical in California for a couple of reasons.  First, employees can bring claims in California courts resulting from a botched investigation.  An employee can sue for failure to prevent harassment, discrimination, and/or retaliation if the employee makes a protected complaint, and the employer either fails to conduct a prompt and thorough investigation, or does not take the appropriate remedial actions after the investigation.  Second, many plaintiffs’ attorneys in California retain HR experts to opine on all of the things the employer should have done to investigate, but didn’t, or all of the ways the employer botched the investigation.

These California-specific issues have led to more frequent requests from clients for guidance on how to conduct proper and solid investigations.  Here is a general overview of things to keep in mind when investigating employee complaints. Continue Reading

It’s Not ALL About the Benjamins – What Really Makes an Exempt Executive

Posted in Exemption Series

By Tim Rusche, Jonathan Brophy and Jennifer Wiegley

It seems simple enough. You hire an employee as a manager, you call her a manager, you pay her like a manager – voila! You don’t have to pay overtime, right?  Not so fast.

Entrepreneurial lawyers and disgruntled employees frequently attack “exempt” classifications to recover overtime pay, missed rest break and meal period pay, and other penalties. To avoid being an easy target, it is critical that employers avoid common pitfalls (like reading this blog with less than rapt attention!) and take affirmative steps to protect the exemption.

The Test:

In addition to earning at least two times the minimum wage, generally speaking, the “executive exemption” requires employees to spend most (i.e., the majority) of their time on management tasks, to regularly exercise discretion and independent judgment, and to supervise at least two employees.  In addition, their recommendations for changes in employment status, like hiring and firing, must be given particular weight.

Common Pitfalls:

  1. Bigger Salaries Are Not Always Better.   Just because an employee receives a high salary does not make him or her exempt under California law.  Regardless of the size of salaries, employees still must meet the other requirements of the exemption.
  2. A Job Title By Any Other Name Would Smell As Sweet.  If an employee is not  actually performing managerial or related duties more than 50% of the time or meeting the other requirements of the exemption, neither an impressive job title nor a detailed job description will save the exemption.
  3. To Deduct, Or Not To Deduct, That Is The Question.  Employers cannot deduct from exempt employees’ salaries for poor performance, lack of work, or some kinds of missed work days.  Employers must consider alternatives to salary deductions for disciplinary measures in order to protect the exemption.
  4. Give Them An Inch And They Will Take a Mile. While discretion is the better part of valor, and the exercise of discretion and independent judgment is an essential element of the exemption, unfettered discretion can actually hinder an exemption defense.  Employers must allow exempt employees to exercise discretion, but when exempt employees are free to work as they please with zero oversight, employers can face an uphill battle when employees argue that they used their discretion to perform mostly nonexempt duties.
  5. Lean Is Good But Too Skinny Is Dangerous. While all businesses strive to run efficiently, employers should provide exempt employees sufficient resources so that they are not compelled to spend most of their time performing nonexempt work.
  6. Independent Contractors May Not Fit the Bill. Exempt employees must supervise at two least other employees. The supervision of independent contractors or employees of contractors may be attacked as insufficient.
  7. Allow Exempt Employees To Rule The Roost.  Oftentimes employers vest hiring and firing decisions in their Human Resources or other departments, or high atop the chain of command.  If an exempt employee’s recommendations regarding hiring and firing or other changes in employment status are regularly ignored, the employee may not qualify for the executive exemption.

Workplace Solutions:  How can you protect executive exemption classifications?  Below are a few tips: Continue Reading

Asking About Criminal History and Conducting Background Checks (“Ban the Box”)

Posted in San Francisco Ordinances

By Soo Cho, Michele Haydel Gehrke, and Pamela Devata

Not only is complying with California’s labor laws challenging, operating a business in San Francisco can be particularly challenging due to a number of San Francisco city ordinances regulating employers.  Most recently, on February 17, 2014, Mayor Ed Lee signed the “Ban the Box” ordinance.  While the ordinance sounds as if it belongs in the same category as other  San Francisco environmental ordinances banning the use of plastic bags, this ordinance, formally known as the “Fair Chance Ordinance,” actually relates to what an employer can ask about relating to criminal history and when an employer can conduct a criminal background check in hiring. San Francisco is joining the ranks of many other states and municipalities who have recently passed similar restrictions “banning” the criminal history box (i.e., HI, MA, MN, RI, Newark, NJ, Seattle, WA, etc.).  See our publications relating to these trends here and here.

The Fair Chance Ordinance requires private employers in San Francisco who employ 20 or more employees (in any location) to limit the use of criminal background checks during the hiring process.  “Employers” is defined broadly to include not only private employers in San Francisco, but also employment agencies, contractors and subcontractors (with performance contracts in excess of $5,000 and for longer than 30 days), and housing providers.

Employers are barred from asking about criminal history or conducting a background check until the employer determines that the individual’s qualifications meet the requirements for the position.  Specifically, the law requires removal of the box or question on an employment application asking “Have you ever been convicted of a crime?”  The ordinance notes that an estimated one of four California adults has an arrest or conviction record and seeks to limit the “unnecessary and significant barriers to employment” created by such application questions. This is similar to the reasoning espoused in Equal Employment Opportunity’s Enforcement Guidance on the Use of Arrest and Criminal Records in the Hiring Process, which can be found here.

Employers in San Francisco may ask about a candidate’s conviction history after the first live interview, but must provide the candidate with a notice of rights (an applicable notice of rights will be published by the city within the next six months).  Employers are also prohibited from considering (1) any arrests that do not lead to convictions, (2) offenses other than felonies or misdemeanors, (3) convictions more than seven years old, (4) an applicant’s participation in or completion of a diversion or deferral of judgment program, and (5) sealed, inoperative or juvenile convictions.

Similar to the federal requirements under the Fair Credit Reporting Act, 15 U.S. C. Sec. 1681 et. seq. and state requirements under the California Investigative Consumer Reporting Agencies Act, Cal. Civ. Code Sec. 1786 et. seq,  the ordinance also provides that if an employer does run a background check and intends to take an adverse action against the candidate based on that information, the employer must: Continue Reading

San Francisco Clarifies That Family Friendly Workplace Ordinance Applies To San Francisco Employees Working For Employers With 20 Or More Employees Worldwide

Posted in San Francisco Ordinances

By Daniel Kim and Michele Haydel Gehrke

The San Francisco Family Friendly Workplace Ordinance, which we discussed in an earlier blog here, allows employees to request “flexible or predictable working arrangements” to care for their loved ones — a child, sick family member, or an elderly parent.  Despite having just gone into effect with the start of this new year, the city ordinance has already undergone an amendment “clarifying” that its reach actually encompasses employers all across the world.

As of February 14, 2014, the amendment clarifies that the ordinance covers employers with 20 or more employees anywhere.  What this means is that even if the San Francisco location of an employer has relatively few employees, if the employer has 20 or more employees anywhere else in the world, the Ordinance applies and those employees working in San Francisco are entitled to the benefits of the Ordinance.

Flexible working arrangements (modified work schedule, job sharing, changes in start/end times, working from home, telecommuting) requested under this new Ordinance are only available to employees who have worked for the employer for a minimum of 6 months and who regularly work at least 8 hours per week.  Within 21 days of the employee’s request, the employer is required to meet with the employee regarding the request and issue a response within 21 days of that meeting.  If the response is a denial, the employer is required to set out the bona fide business reason for the denial in writing and to provide notice of the employee’s right to request reconsideration.

More information, including the official notice of this new ordinance, is available on the San Francisco Office of Labor Standards Enforcement’s website.

Seyfarth Shaw has developed template forms and policies employers can use to comply with the Ordinance.  Contact the authors of this blog or your favorite Seyfarth attorney for more information.

Also: Stay tuned for next week when we will discuss San Francisco’s brand new Fair Chance Ordinance, signed February 17, that limits employers’ and contractors’ usage of criminal background checks in screening their workers.

Edited by Chelsea Spuck