2017 Cal-Peculiarities

Seyfarth Synopsis: Private employers can face competing obligations when it comes to responding to employees’  expressive conduct. Employee rights may collide with employer obligations to maintain a safe and harassment-free work environment, not to mention the employer’s interest in maintaining productivity and avoiding adverse publicity. Here are some guiding principles.

“How’s work?” A common question, whether at a party, catching up with an old friend, or just as small talk. It is also a common topic of online conversation. It would be nice if work-related remarks were always positive, agreeable and civil, but, of course, they are not. The reality is that employees sometimes say offensive things about work, their employer, their co-workers, or a co-worker’s cherished political hero or ideals.

And what of the employee who attends a political rally—either as a protester or counter-protester—or does not attend, but merely posts or tweets an incendiary opinion about the event?

What is an employer’s recourse when such communications cross the line? Where is the line?

As a general rule, unless the employee is using company-owned equipment or systems, employers cannot police their employees’ expression. Various California statutes protect employees’ rights to engage in lawful, off-duty conduct (Lab. Code §§ 96, 98.6) and political activity (Lab. Code §§ 1102, 1103), to say nothing of the California constitutional right to privacy, which applies in both the public and private sectors. Meanwhile, the federal National Labor Relations Act prohibits employers from chilling employee participation in concerted activity with respect to their terms and conditions of employment.

Generally, as long as controversial comments and ideas are lawfully expressed, do not implicate a protected class (such as race, religion, gender), do not name or implicate the employer, and remain out of the workplace, they are none of the employer’s business.

The trouble starts when a controversial comment is not lawfully expressed, implicates a protected class, implicates the employer, or has a deleterious effect in the workplace. Competing against the employee rights set out above are the employer’s duties to prevent and correct harassment in the workplace and to provide a safe workplace. Failure to do so can lead to hostile work environment or retaliation claims, regardless of whether the harassment comes from a supervisor or a co-worker.

Not all offensive remarks will be cause for concern: to get from “how’s work?” to a hostile work environment claim, an employee’s comments must relate to a protected status and be sufficiently severe or pervasive to alter working conditions. But in todays’ highly charged political environment, many people look to their places of employment as the last bastion of civility and stability. Discussion of events, images, symbols, or social media memes concerning topics as varied as immigration, same-sex marriage, transgender rights, and the history of American slavery and its aftermath may, depending on the communication’s content and context, be freighted with racial or gender connotations.

For most people, perception is reality. Remarks or conduct that several years ago would not have raised an eyebrow may now lead to multiple disgruntled people in the HR office, seeking action. And while California employees are guaranteed privacy, the privacy right does not prevent an appropriate reaction from an employer in response to a public online posting, text message, or comment. As someone once said: “Freedom of speech does not mean freedom from consequences.”

There is no magic bullet to making sure your employees play nice. But there are several steps you can take to ensure that they know what will and will not be tolerated. You can set employee expectations by implementing or reminding them of your anti-harassment and anti-retaliation policy, your code of conduct, your “zero tolerance” policy regarding violence, your social media policy, and your rules concerning use of company internet and other electronic communication systems. We recommend that employers articulate a strong business purpose to justify any occasions when they must intrude on an employee’s privacy, and never intrude more than is necessary to serve that business purpose.

Interpretation of the laws around employee workplace rights and the intersection with employer duties to comply with anti-harassment and OSHA laws are constantly evolving, particularly with the ever-increasing use of social media. To help stay current, don’t hesitate to contact your favorite Seyfarth attorney.

Seyfarth Synopsis: California courts are often hostile towards defendants that seek to require litigious employees to honor their arbitration agreements. The defendant’s plight might seem more stark still if the defendant has not itself signed the agreement. But defendant employers still have means of enforcing such agreements, which can be especially significant in class actions claiming joint employment. 

Despite the strong federal policy favoring arbitration, it is no secret that enforcing arbitration agreements in California can be tough. The task is tougher yet for the defendant that finds itself being sued by someone with whom the defendant has never had a contractual relationship, although she has signed an employment arbitration agreement with a co-defendant. This is because, under the general rule, one must be a party to an arbitration agreement in order to invoke it.

With recent waves of litigation seeking to expand the scope of joint employment, the issue of enforcing arbitration agreements on behalf of nonsignatories has become increasingly important. One typical situation involves a staffing company being sued by an employee who, looking for a deeper pocket, also sues the staffing company’s client. In another typical situation, a franchisee’s employee sues both the franchisee and the franchisor. Suppose, in both situations, the employer and the employee have agreed to arbitrate any claims between them. But in both situations, the upstream defendant (in our situations, the client or the franchisor) has never had a chance to negotiate an arbitration agreement with the plaintiff, as the plaintiff and the upstream defendant have never had any contractual relationship at all. In those cases, the upstream defendant experiences the worst of both worlds: it is being sued as the plaintiff’s “employer” and yet, not really being the plaintiff’s employer, the upstream defendant has never had the chance to implement an arbitration agreement with the plaintiff.

As it turns out, there is hope for enforcing the arbitration agreement on behalf of the upstream defendant in these situations, even though it never signed the agreement. There are three exceptions to the nonsignatory rule. Application of the first two can depend on how the claim is pleaded. Application of the third is relatively sure, if the upstream defendant plans properly to assure itself that the arbitration agreement in place is adequate. We discuss each of the three exceptions below.

Agency

Nonsignatories may enforce an arbitration agreement under an agency theory. If the plaintiff claims that a defendant acted as the agent of a party to an arbitration agreement, then the non-party defendant may enforce the agreement. This claim often arises where the plaintiff alleges that the non-signatory defendant was a joint employer. Earlier this year, a California appellate case upheld the enforcement of an arbitration agreement under this very theory. Employers seeking to avail themselves of this theory should carefully evaluate the allegations in the complaint against them. If they meet these standards, then asserting an agency theory may be a successful way to enforce the agreement.

Equitable Estoppel

A lesser known exception available to nonsignatories seeking to enforce an arbitration agreement is equitable estoppel: a nonsignatory defendant can compel the signatory plaintiff into arbitration when the claims against the nonsignatory are “intimately founded and inextricably intertwined” with the underlying contract obligations. Equitable estoppel applies when the claims are based on the same facts and inherently inseparable from the arbitrable claims against the signatory defendant. A California court recently acknowledged this theory in the employment context, particularly because the plaintiff made no effort to distinguish between his claims against his employer (the signatory) and the non-signatory defendant.

Again, when considering raising this argument, it is important to carefully analyze the allegations in the complaint. Should they be the same against all defendants, equitable estoppel may be an option for enforcing the agreement.

Third Party Beneficiary

While the first two ways for a nonsignatory to enforce an arbitration agreement may depend on how the plaintiff pleads the case, a more certain basis for enforcement exists where the language of the arbitration agreement clearly expresses an intent to allow nonsignatories to enforce it. The intent to thus benefit a third party can appear even if the agreement does not specifically identify the third party by name. It would be enough if the third party belongs to the class of clearly identified beneficiaries.

The third-party beneficiary exception places a premium on the adequacy of the arbitration agreement’s language. The employer that signed the agreement—the staffing agency, for example, or the franchisee—will have every incentive, as a good corporate citizen, to see that its arbitration agreement benefits not just itself but also potential upstream defendants, such as the staffing agency’s client or the franchisee’s franchisor. And the potential upstream defendant, of course, will be more inclined to deal with a potential joint employer if that employer has in place an adequate arbitration agreement that properly addresses issues of enforcement and that provides, where appropriate, for waiver of class or collective or representative arbitration.

Navigating issues enforcing arbitration agreements in California can be complicated. If you would like assistance in drafting an agreement or help enforcing an agreement in the defense of a lawsuit, please contact one of Seyfarth Shaw’s attorneys.

Seyfarth Synopsis: The Trump Administration’s hard line on immigration has concerned undocumented immigrants who want to raise wage claims. The LWDA recently reaffirmed a commitment to protect workers regardless of their immigration status.

California has noticed the Trump Administration’s immigration initiatives. Here, as elsewhere, California charts its own path. The state’s labor law enforcement officials worry that the immigration crackdown has panicked undocumented workers, causing them to withhold complaints against their employers, for fear of deportation. Indeed, some undocumented workers reportedly have declined to accept unpaid wages owed to them, and have refused to cooperate with government investigations. There have been reports of ICE agents showing up at California Labor Commissioner proceedings to remove undocumented workers who are appearing to prosecute their labor claims against their employers.

On May 1, 2017, the LWDA reaffirmed its commitment to worker protections regardless of their immigration status:

Just because the federal administration has changed, our laws and policies have not. … We will not tolerate the use of immigration status as a tool of retaliation against workers who are pursuing their rights under California law. … The California Labor and Workforce Development Agency and its partner departments reiterate that we never ask for – nor do we collect – the immigration status of any worker who files a health and safety or wage theft claim with our offices. It has been longstanding state policy that our labor laws apply to all workers, regardless of immigration status, and that the immigration status of a worker is unnecessary information to enforcing our laws.

The full press release appears here.

Thus, regardless of what the Trump Administration does, the LWDA is making it clear that California’s labor protections apply to all employees – regardless of their immigration status – and that the LWDA will ensure that immigrant workers know that California workplace protections apply to them.

The LWDA’s statement reminds California employers that they can still be subject to liability, fines, and investigations for Labor Code violations no matter what the federal government does. Immigration status remains, in the view of the LWDA, irrelevant to the enforcement of California wage and hour laws. Thus, employers should not treat immigrant workers differently because of their status.

California wage and hour law can be difficult to navigate. If you would like to review your policies for compliance, you may contact one of Seyfarth Shaw’s attorneys for assistance.

Edited by Michael Wahlander.

Seyfarth Synopsis: The DLSE enforces California labor laws. In two recent enforcement actions, the DLSE collectively recovered over one million dollars, so California employers should read on to find out more about this robust administrative agency.

What Is The DLSE And Why Should Employers Care?

The California Division of Labor Standards Enforcement (aka the DLSE or the Labor Commissioner’s Office) is a recurring character in our blog. Usually we discuss new guidance the DLSE has offered. But the DLSE serves another function as well: it enforces the statutory provisions governing wages, hours, and working conditions of employees, and enforces the wage orders promulgated by the Industrial Welfare Commission. The DLSE’s mission is to “ensure a just day’s pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws.”

To carry out its mission, the DLSE has free access to “all places of labor.” The Labor Commissioner can issue subpoenas to compel the attendance of witnesses and parties or the production of books, papers, and other records. And if employers do not comply with the subpoena, the DLSE can go to court to force compliance. In a nutshell, the DLSE has broad authority to inspect workplaces for wage and hour violations, investigate retaliation complaints, adjudicate wage claims, and prosecute actions on behalf of employees in civil court.

So How Does That Work?

The DLSE executes its mission through various mechanisms. During the 2015-16 fiscal year, the DLSE inspected over 2,400 worksites and issued citations for 2,100 violations. Most citations were for failure to carry workers comp insurance or to issue an itemized wage statement. The inspections led to over $18 million in penalties.

The DLSE also conducts payroll audits, to identify wage violations based on misclassification of employees or misreporting of time. Last year DLSE audits resulted in over $25 million in wage and civil penalty assessments.

What Are The DLSE’s Priorities?

Given the breadth of the DLSE’s authority, and the number of penalties it assesses, it has a wide array of enforcement priorities. We focus here on cases that the Labor Commissioner has deemed significant enough to highlight on the DLSE website.

On June 27, 2017, the DLSE announced it recovered over $48,000 in back wages for a convenience store clerk after the DLSE hearing officer found the clerk was owed minimum wage and premium pay for overtime work. The clerk, acting without an attorney, filed a wage claim in March to seek $14,520 in unpaid regular wages. The hearing officer, finding the clerk was actually owed much more, awarded him $42,980—$22,162 in regular and overtime wages, $14,707 in liquidated damages, $3,586 in interest, and $2,524 in waiting time penalties. The Labor Commissioner noted: “This case shows that when workers exercise their labor rights and come forward to report wage theft, they can do so on their own without an attorney, they can receive the wages they are owed, and in some cases even more.”

The DLSE has also recently defended a judgment it won for five truck drivers on the basis that they had been misclassified as independent contractors and were entitled to reimbursement for expenses and unlawful deductions. The defendant appealed the administrative award, arguing that the Labor Commissioner lacked authority because the claim was preempted by the Federal Aviation Administration Authorization Act. The trial court rejected that argument and found all five drivers were misclassified as independent contractors. The judgment in their favor was for $958,660 plus attorney’s fees and costs.

These cases highlight a few important reminders:

  • An employee does not need an attorney to prosecute claims for wage and hour violations.
  • The DLSE focuses on adjudicating wage and hour claims and is not afraid to pursue these claims in court.
  • California employers should ensure their wage and hour practices remain compliant and that any potential misclassification issues are properly reviewed—or risk judgment by the DLSE and the payment of attorney’s fees and costs if an adverse ruling is appealed and the DLSE succeeds in court.

Please contact your favorite Seyfarth attorney for assistance with remaining compliant with California’s labor laws.

Edited by Michael Cross.

Seyfarth Synopsis:  As if high rent and California’s peculiar laws were not enough to worry about, San Francisco employers must also comply with City-specific ordinances. Trailblazing City requirements often exceed state laws and have sometimes been harbingers of state-level enactments. One might say that San Francisco, with its distinctive laws, is to California what California is to the rest of the country. We highlight the Big Eight SFO peculiarities, below.

Minimum Wage

Minimum wage is an example of San Francisco taking the lead and inspiring changes to state law. On July 1, 2017, San Francisco’s minimum wage officially increased to $14.00 per hour; on July 1, 2018, it will jump to $15.00. The rates apply to all employees who work at least two hours per week within the City or County of SF. The City approved these rate increases years before the California Legislature followed suit in passing the Fair Wage Act of 2016, which mandated an annual state-wide increase until it reaches $15.00 in 2020. Might the City then push to exceed this amount come 2020?

Paid Sick Leave

Paid sick leave is another area where City entitlements differ from those available under state law. San Francisco says that all employees, including part-time and temporary workers, are entitled to paid sick leave when they are ill, require medical care, or need to care for their family members or designated person. While state law currently provides employees with three days (24 hours) of paid sick leave for most of the same reasons, the City offers employees significantly more protected paid time off.

San Francisco employers with fewer than 10 employees must allow workers to accrue up to 40 hours, and those with 10 or more employees must allow accrual up to 72 hours. Not only are employees thus entitled to two to three times what the state mandates, but any unused days also carry over year to year (subject to the above accrual caps). Remember that employers must comply with both state and City laws, as satisfying one does not satisfy the other. Originally enacted in 2007, the City amended its paid sick law as of January 1, 2017, so check out the City’s FAQs for additional updates.

Paid Parental Leave & Family Friendly Workplace

San Francisco has its own take on California’s family-related leave programs—with two separate but related ordinances. You may recall that California’s Paid Family Leave offers six weeks of partial pay/wage replacement (after an eight-day waiting period) to employees who are otherwise entitled or permitted to take time off to bond with a new child or to care for a seriously ill family member. The California Family Rights Act (“CFRA”) also mandates that covered employers give 12 weeks of unpaid, protected leave within a year to eligible employees for a child’s birth, adoption, or foster placement, for the employee’s own serious medical condition, or to care for a seriously ill or injured family member. To be eligible for CFRA leave, an employee must have worked for the covered employer for at least a year and have clocked 1250+ hours.

In San Francisco, by contrast, an employee needs only eight hours per week on a regular basis for six months before taking advantage of its Paid Parental Leave benefits. While matching the state’s six weeks of state (EDD) paid time for new child bonding, San Francisco requires that the employer also pay the leave in the form of supplemental compensation that, in conjunction with California’s Paid Family Leave benefits, equals 100% of the employee’s gross weekly wages. Currently, this law applies to employers with 35 or more employees (regardless of location) and employees working 40% or more of their hours in San Francisco. Beginning January 1, 2018, this law will expand to include all employers with 20 or more employees.

San Francisco has a separate ordinance that attempts to make what is often a difficult time easier for individuals who have family caregiving obligations. Employees who have worked eight hours per week for six months can request a flexible or predictable schedule to assist with these responsibilities. Specifically, the law applies to employers with 20 or more workers (regardless of location) and covers caring for children under 18, seriously ill family members, and parents of the employee who are over 65. San Francisco wants the state to know that family friendliness begins here!

Health Care Security

San Francisco’s mandatory health care law ensures that employees are cared for, too. Employers must make health care expenditure payments each quarter for every employee who has been working more than 90 days. Employers with fewer than 20 employees are exempt altogether, but employers with 20-99 employees must spend $1.76 per hour payable per each employee, while those with 100+ must spend $2.64 per hour. The City allows these payments to be made to the employee directly, to the City, or as a contribution to a reimbursement program. Under this ordinance, the City may impose several different penalties for non-compliance, so getting caught not paying these expenditures would certainly be worse than catching a cold!

Fair Chance (SF’s Version of “Ban-the-Box”)

The City does not believe that having been behind bars should necessarily bar the employment of qualified individuals. The Fair Chance ordinance aims to make work more accessible and put applicants with prior arrests or convictions on an even playing field. All employers with more than 20 employees must state in job solicitations that qualified applicants with arrest or conviction records will be considered. Employers also must not ask about such records until after a live interview or a conditional offer, at which time only arrests or convictions directly related to the ability to perform a given job may be considered in the hiring decision. An employer that chooses not to employ an applicant with a record must first allow the individual a chance to respond with evidence of inaccurate information, rehabilitation, or other mitigating factors.

California currently prohibits employers from asking about certain criminal records, including arrests that did not result in criminal convictions and convictions that have been dismissed or expunged. As of July 1, 2017 (per new FEHC regulations that we discussed here that are similar to San Francisco’s law), California employers may not consider criminal records in hiring decisions that would adversely affect individuals belonging to a protected class. If there is a disparate impact, then employers must show that their background check policy is “job-related and consistent with business necessity.” Before making a decision based on criminal records, employers must conduct an individualized assessment that allows anyone screened out by the policy to respond with proof that the background check is inaccurate or with reasons why adverse action should not be taken.

Formula Retail Employee Rights

Whether it be disrupted budgeting, inconvenience, or some other reason, employees can get upset when their work schedule suddenly changes; San Francisco has a law for that. Chain stores with 40+ locations worldwide and 20 or more people working in San Francisco must provide notice of the work schedule two weeks in advance. In addition, employers must provide “predictability pay” whenever an employee’s schedule changes with less than a week’s notice, and if an on-call employee is required to be available but is not called into work during the shift, the employer must still pay them for that time.

These same employers must offer (in writing) any available extra hours to current qualified part-time employees before they can hire someone new to cover the workload. If an establishment is sold, the successor employer must retain, for 90 days, any eligible employee who worked longer than six months before the sale. San Jose voters passed a comparable ordinance, and new legislation was recently introduced in the California legislature with aims to enact a similar law. Beware of these special laws that apply “within the City and County” soon getting a California-sized expansion!

Lactation Accommodation

In June 2017, the San Francisco Board of Supervisors approved specific legislation requiring employers to provide a private space for new mothers to pump their milk. The ordinance goes into effect January 1, 2018, and calls for a clean space that contains a chair, access to electricity, and surface space for a breast pump. In addition, the employee’s workspace must be in close proximity to a sink with running water as well as a refrigerator. Subject to certain exceptions, if such a space does not exist, then one must be constructed. Employers will be required to distribute the company’s lactation accommodation policy to all employees at the time of hiring.

While state and federal law mandate that employers make reasonable efforts to provide new mothers with lactation breaks throughout the workday, San Francisco’s more expansive legislation may very well be a predictor of what’s next to come on the state level.

We will keep you informed of updates and changes to these ordinances as violations can come with hefty penalties or result in administrative investigations and civil suits. It should be noted that some exceptions and exemptions apply, and those details and additional requirements can be found on the San Francisco Office of Labor Standards Enforcement website. To ensure your company is compliant, or if you have questions about anything mentioned here, Seyfarth’s Labor and Employment attorneys are available to assist you.

Edited by Michael A. Wahlander.

Seyfarth Synopsis: On July 17, 2017, the California Fair Employment and Housing Council (FEHC) heard public comments on its proposed regulations covering national origin discrimination under the FEHA. Discussion centered on employer-imposed language restrictions, English proficiency requirements, and immigration-related employment practices. Look for final regulations later this year. 

The FEHC kicked off its third meeting of the year, this time in San Francisco. Prominent on the agenda: the proposed and rapidly advancing national origin discrimination regulations. As stated in the FEHC’s notice of the meeting: “The overall objective of the proposed amendments is to describe how the [FEHA] applies to the protected class of national origin in the employment context, primarily by centralizing and codifying existing law, clarifying terms, and making technical corrections.”

A call to enact these regulations first came from Legal Aid at Work (an employee-oriented legal services organization formerly known as the Legal Aid Society, Employment Law Center), during the FEHC’s August 31, 2016 hearing. The FEHC quickly created a subcommittee and drafted regulations, which we previously reported on here, that largely mirrored the EEOC’s guidance on national origin discrimination.

At the July 17 hearing, public comments revolved around (a) language restrictions (“English only” rules), (b) employer requirements for English language proficiency, (c) discovery as to an individual’s immigration status during the liability phase of any lawsuit or other proceeding to enforce the FEHA’s prohibition of national origin discrimination, and (d) expanding the definition of what constitutes harassment on the basis of national origin. The only public comments received at the hearing were from employee-leaning individuals and groups.

English only. The draft regulations would make it an unlawful employment practice for an employer to adopt a policy that creates an “English only” rule, unless (1) the rule is job-related and consistent with business necessity, (2) the rule is narrowly tailored, and (3) employees get effective notice of when and where the rule applies and what consequences result from a violation.

The regulations would also provide that an English-only policy would not be valid simply for promoting business convenience or reflecting customer preference. Representatives of Legal Aid at Work emphasized at the hearing that the latter should be amended to state a co-worker preference, not the customer’s.

Further, the regulations would explicitly presume that English-only rules violate FEHA unless the employer can prove “business necessity”—defined narrowly as “an overriding legitimate business purpose” that is necessary to the safe and efficient operation of the business, where the policy effectively serves that purpose, and where there is no alternative to the language restriction that would serve the business purpose as well, with less discriminatory impact. One commentator at the hearing argued that the FEHC should expand this presumption to find a violation if there is no effective employee notification about the language restrictions. Legal Aid at Work also called for the FEHC to draft a new section to address how an English-proficiency requirement relates to an employee’s ability to perform the job. These folks would like CA to distinguish itself from the reasoning of Garcia v. Rush-Presbyterian-St. Luke’s Medical Center, in which the court approved an employer’s requirement for verbal and written English proficiency in part because English was the dominant language in the area.

Discovery of Immigration Status. The FEHC also heard public comments to clarify the complex rule about when discovery into an individual’s immigration status is allowed during the liability phase of a proceeding. The proposed regulations would permit such discovery “only when the person seeking to make the inquiry has shown by clear and convincing evidence that such inquiry is necessary to comply with federal immigration law.” The commentators argued that mere possession (or lack) of a driver’s license would not constitute “clear and convincing evidence,” as all California residents are eligible to receive a license, regardless of immigration status.

Expansion of “harassment.” A representative of the California Employment Lawyers Association (a group of plaintiffs’ lawyers calling themselves an employee-rights group) called for expansion of the harassment portion of the regulations, to include specific reference to banning creation of a hostile work environment on the basis of national origin. Speakers also asked that the FEHC expand what would constitute as per se harassment to include deportation threats against an individual’s blended family members (i.e., step-parents, step-aunts and uncles, and step-children).

The comment period for the proposed regulations closed at 5 p.m. on July 17th. We anticipate the FEHC will consider all comments before issuing a final statement of reasons and potentially revising the proposed regulations.

We will keep you apprised of what the FEHC opines next on the topic of national origin regulation. For advice on how these regulations may affect your business, reach out to your favorite Seyfarth attorney.

Edited by Colleen Regan.

Voting is open for the American Bar Association’s annual 100 Best Legal Blawgs competition, though this year the contest is a “Web 100” and will include websites and social media along with legal blogs. We hope you will cast your vote today to help Seyfarth’s California Peculiarities Employment Law Blog get on the ABA’s list for 2017.

In most of the country, 2 + 2 predictably equals 4. In California, sometimes the results are surprising. The California Peculiarities Employment Law Blog is a unique resource for employers navigating the reefs and shoals—and peculiarities—of California employment law.

Our blog is for in-house attorneys, HR professionals, business owners, and managers who face real issues on a daily basis and need practical solutions to address them. We aim to provide timely, topical information on the challenges that California employers face. Unlike blogs that simply provide legal updates, this blog has a running series of Workplace Solutions that address evolving areas of interest, including California leaves of absence, recruiting and hiring, trade secrets, and the use of social media.

Help us gain some extra recognition by casting your vote in the ABA’s Web 100 competition!

Click here to vote. Simply provide a short explanation of why you like this blog.

The deadline to nominate the blog is Sunday, July 30, 2017, so don’t delay. Polls are open!

Seyfarth Synopsis: Although there’s no right or wrong time to do a handbook update, we recommend them annually. Might as well take the opportunity when operations are typically slower, summertime, to give your handbook a shine. We’ve highlighted a few areas upon which to focus when you do so.

Ah, the joys of summer. Maybe it’s the heat, but everything seems a little harder in the summer. The sun is melting everything in sight, and sometimes it seems everyone is on vacation, leaving a little opportunity for the rest of us to have some *gasp* free time? This is the time of year, after all, when everything just seems to slooooooooooooooow dooooooooooooooooooown.

But because we’re all looking for an excuse to spend a little more time in nice air conditioned comfort, and we need to cure that summer boredom, when was the last time you updated your handbook?

Here are a few areas you may want to check while you enjoy that recycled air:

Did you update when the FEHA Regulations were amended last year?

As we discussed here, the FEHA Regulations now include many new requirements for employer policies on harassment, discrimination, and retaliation. If you haven’t had an opportunity to do so, we recommend you dust off those old policies and go through the amended regulations with a fine-toothed comb to see where improvements can be made.

How about breaks?

As we reported here, the end of 2016 saw some developments in the world of rest breaks. Some traditional policies may exert a little too much control over how employees take breaks. We’d definitely use that occasional summer thunderstorm as an excuse to spend time carefully perusing that policy.

What am I wearing?

If your dress code includes gender-specific information, now is a good time to review and make some potential modifications in light of the FEHC regulations on transgender rights, described here.

Sick of sick time yet?

Not that anyone gets sick in the summer, but if your company operates in multiple jurisdictions, it’s a great time to make sure no new sick law affects your employees. California now has six jurisdictions (San Francisco, Oakland, Emeryville, Santa Monica, San Diego, and Los Angeles, summarized here) with sick leave laws for private employers, with Berkeley right around the corner. Take this time to compare these ordinances and the state law with your current policy to make sure you’re in great shape for the upcoming flu season.

It’s also a great opportunity to spruce up your attendance policies to make sure you’re not punishing your employees from properly taking absences covered by these or other leave laws.

Who’s on leave?

A few years back, the California Legislature expanded those activities covered by the Family School Partnership Act, described here. So if you haven’t taken a look at this policy in a while, might as well get that out of the way before school starts up this fall.

For your San Francisco folks, if you haven’t had an opportunity to put together a policy/protocol covering the responsibilities of the San Francisco Paid Parental Leave Ordinance, described here, now is as good a time as any.

Also, as we discussed here, we know the law requiring the notice and posting on Domestic Violence issues became effective on July 1. Perhaps now would be a good time to consider implementing a policy on this if you don’t already have one in place.

Workplace Solution?

Although not every change in the law will make you toss out that old handbook, we do think an annual review, whether over a relaxing summer break or as you shiver indoors this winter, is a great opportunity to ensure you’re complying with the ever-evolving California and local laws. It can also serve as a reminder to compare your handbook with any benefit documents referred to inside.

Go ahead and spend a few minutes with a nice icy glass of lemonade and curl up with your favorite summer read: the company handbook! And contact your favorite Seyfarth counselor to get yours in ship shape before the kiddos come home from camp, and everything gets crazy for back to school.

Seyfarth Synopsis: Just when you thought it was safe to relax for the summer, California is giving employers four new reasons to keep on their toes. Laws going into effect on July 1, 2017, will address (1) domestic violence, (2) the minimum wage, (3) criminal background checks, and (4) transgender rights.

Notice Posting and Leave for Domestic Violence Issues

Employers must now notify employees of workplace rights regarding domestic violence victims. By way of background, Labor Code section 230.1 forbids employers with 25 or more employees to discriminate against employees who take time off to

  • seek medical attention for injuries caused by domestic violence, sexual assault, or stalking,
  • obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence, sexual assault, or stalking,
  • obtain psychological counseling for domestic violence, sexual assault, or stalking, or
  • participate in safety planning or other actions (including temporary or permanent relocation) to increase safety from domestic violence, sexual assault, or stalking.

Employees taking time off must give the employer reasonable advance notice, unless the advance notice is not feasible. But if the employee takes an unscheduled absence, the employee remains protected by providing, within a reasonable time after the absence, a certification of the protected reason for leave. Employers must maintain the confidentiality of the reason.

The Labor Commissioner has developed a notice form for use which can be found here. You can find Section 230.1 here.

Minimum Wage Increases for Los Angeles, San Francisco, Santa Monica and Emeryville

Earlier this year, California once again hiked its minimum wage (to $10.50).  But for some municipalities that was not enough. On July 1, the minimum wage rises in certain California cities/counties:

Before Increase:                    July 1, 2017:

Emeryville:
(56 or more employees)         $14.82                                     $15.20
(55 or fewer employees)        $13.00                                     $14.00

Los Angeles:
(25 or more employees)         $10.50                                     $12.00
(25 or fewer employees)        $10.00                                     $10.50

San Francisco:                        $13.00                                     $14.00

Santa Monica:
(26 or more employees):        $10.50                                     $12.00
(25 or fewer employees):       $10.00                                     $10.50

For further information, visit your local website.

New Criminal Background Check Regulations

On July 1, the Fair Employment and Housing Council will begin to enforce new regulations which will impose additional burdens on use of criminal background checks in employment decisions. As with any criminal background check policy that creates an adverse impact on a protected class, the employer must justify the policy as job-related and consistent with business necessity.

The regulations identify two ways an employer could justify the policy: (1) show that a “bright-line” disqualification properly distinguishes those who do and do not pose an unacceptable level of risk; (2) individually assess the individual’s qualifications. The employer must also give the applicant or employee a reasonable opportunity to show that the conviction information is wrong. If the individual provides evidence of factual inaccuracy, then the conviction cannot be considered in the employment decision.

Even when an employer can show job-relatedness and business necessity, an individual can still prevail on a claim if there is a less discriminatory alternative (such as a narrower list of disqualifying convictions) that advances the employer’s legitimate concerns as effectively as the challenged practice would.

The regulations pose a substantial new risk to employers who maintain no-hire policies for individuals with criminal convictions. Any such policy should be reviewed for compliance.

You can see the final regulations here.

FEHC Transgender Rights Regulations

On July 1, Fair Employment and Housing Council regulations will expand upon laws relating to gender identity and expression.

As background, note that as of March 1, 2017, all single-user toilet facilities in any California business establishment, place of public accommodation, or government agency must be identified as “all-gender.” As of July 1, transgender employees must have equal access to restrooms and other facilities, including locker rooms, dressing rooms, and dormitories. Employers now must allow employees to use those facilities without regard to the employee’s assigned sex at birth. The regulation provides that employers may make reasonable, confidential inquiries of employees to ensure that facilities are safe and adequate for use.

The July 1st regulation also

  • require employers to honor an employee’s request to be identified by a preferred gender or name,
  • forbid employers to impose appearance, grooming or dress standards inconsistent with an individual’s gender identify and gender expression,
  • forbid employers to require proof of an individual’s sex, gender, gender identity or gender expression, and
  • expand existing gender expression, gender identity and transgender definitions to include “transitioning” employees.

The expanded definition of this protected class may likewise expand liability for harassment, which is particularly likely with respect to a group traditionally subject to discrimination.

Employers should review policies and consider management training to ensure compliance with the California initiatives around gender identity and expression.

You can see the newly adopted regulation here.

Edited by Michael A. Wahlander.

Seyfarth Synopsis: California’s Department of Fair Employment and Housing has just issued its Annual Report on civil rights complaints during 2016. Here are some highlights.

The DFEH hails as the largest state civil rights agency in the country, with 220 full-time employees operating out of five offices throughout California. Its annual report makes clear that its core work is litigation. It sues chiefly under the Fair Employment and Housing Act, California’s more expansive version of federal anti-discrimination law, and also sues under the Unruh Civil Rights Act, the Disabled Persons Act, and the Ralph Civil Rights Act.

The annual report comes in the DFEH’s fourth year as an active litigant. Beginning in 2013, the DFEH gained power to file lawsuits to pursue violations of the state’s anti-discrimination laws. No longer is there administrative adjudication of claims by the Fair Employment and Housing Commission (now defunct). The DFEH now has broad authority to sue California employers, housing providers, and other entities for unlimited compensatory damages, as well as attorney fees and costs. Moreover, the DFEH can launch state-wide class or representative actions for systematic or large-scale violations of state civil rights laws. And, like its big sister, the federal Equal Employment Opportunity Commission (which has always been able to sue in court), the DFEH may go beyond monetary damages and demand certain forms of “affirmative relief,” such as employee retraining, redrafting and posting of policies, and regular monitoring to ensure compliance. In short, the DFEH is now a fully operational litigation shop, employing investigators, litigators, paralegals, and mediators.

A Tidal Wave of Complaints. The DFEH received more than 23,000 general administrative complaints and inquires in 2016. The amount was on par with 2015, and significantly more than the 19,000 filed in 2014. About 93% of 2016 complaints were employment-related, 6% were housing matters; the rest involved claims under the Unruh, Ralph, and Disabled Persons Acts. About 17,000 complaints resulted in formal charges filed with the DFEH. Most of the formal charges (12,242) requested an immediate right to sue, thus bypassing the DFEH’s investigation process.

A plurality of the 2016 formal charges (6,614, or 38%) originated out of Los Angeles County. Next in order were Orange, San Diego, and San Bernardino Counties (7%, 6%, 4% respectively). Together, these four counties created most of the DFEH’s 2016 workload: SoCal employers beware! Surprisingly, Sacramento County—not San Francisco County—accounted for most charges filed in Northern California (Alameda County was the most active in the Bay Area). Placer County, with 120 formal charges, was the most litigious in 2016 in proportion to its population size.

In terms of demographics, little is known about the 2016 class of DFEH complainants. The DFEH tracked only race and national origin, on the basis of the complainants’ self-reporting. Only 51% of complainants identified their race, and 65% identified their national origin. Of those who self-reported, Caucasian individuals topped the list with 35% of complaints; American or U.S. national origin was most reported, at 52% of complaints. Individuals identifying as Hispanic or Latino filed 28% of complaints in 2016, and those identifying as African American filed 22%. The DFEH did not collect data on the complainants’ sex, gender, age, religion, marital status, household income, or other demographic information.

Most Complaints Did Not Settle. The DFEH investigated 4,799 complaints in 2016. The DFEH settled a total of 1,036 complaints (21%), and referred 118 to the Legal Division, which brought 31 civil actions. The remaining 3,700 complaints were presumably withdrawn by the complainant, settled without the DFEH’s participation, dismissed by the DFEH, or consolidated into a single lawsuit.

Moneywise, the DFEH’s Enforcement Division resolved 573 complaints for a total of $2,635,979, which was the most settlements for any division (averaging $4,600 per settlement). The Dispute Resolution Division, which conducts mediation when the parties voluntarily agree to mediate, brought in the highest dollar amounts via 417 settlements with $7,385,372 ($17,710 average). The Legal Division raised $1,553,800 by settling 46 complaints ($33,778 average). In total, the DFEH conducted 783 mediations in 2016 (up considerably from 632 in 2015 and 590 in 2014).

The DFEH Carefully Selects Which Cases To Try. Less than 1% of 2016 complaints resulted in litigation. Of the 4,799 claims the DFEH investigated, it referred only 118 (2%) to the Legal Division, which then brought only 26% of that total to litigation. As noted above, the DFEH filed 31 lawsuits for 75 complainants during 2016, while filing 36 lawsuits for 57 complainants during 2015.

One-half of the 118 complaints referred to the Legal Division were housing-related. Employment claims made up 40%, followed by Unruh Act claims at 6%, Ralph Civil Rights claims at 3%, and Disabled Persons Act claims at 1%. Substantially more employment claims had been referred to the Legal Division in 2015 (73 of 130 complaints, or 56%).

Housing-related complaints were statistically the DFEH’s priority in 2016. The annual report does not specify the total number of housing complaints, but nearly 70% of complaints involved claims for FEHA housing violations. This percentage is markedly higher than in 2015, where only 36% complaints related to housing issues. Employment complaints were king in 2015 comprising 59% of complaints, but that number decreased in 2016 to 25%. Overall, the DFEH was consistently more focused in 2015 and 2016 on FEHA violations—including employment and housing claims—than with complaints regarding the Unruh, Ralph, and Disabled Persons Acts.

Disability discrimination was the claim most frequently asserted by the DFEH in 2016 in litigated matters (as it was in 2015), appearing seven times in the employment context and 11 times in the housing context. Race and ancestry discrimination were asserted only once, sex/gender discrimination only twice, and sexual harassment only four times. Retaliation was asserted seven times against employers and five times against housing providers.

Lessons For 2017 And Beyond. The DFEH is evidently hand-picking the few complaints it takes to court each year. Only a small percentage of claims make their way to the DFEH’s Legal Division, which is the final stage before a lawsuit is filed, so employers and housing providers should consult with litigation counsel if they find themselves in that unfortunate position (or earlier).

The data and public filings, consistent with our experience with the DFEH, indicate that the DFEH did not target any particular industry or size of entity in 2016: public entities, such as high schools and cities, as well as small non-profit organizations found themselves in the DFEH’s crosshairs. And the DFEH hauled into court businesses in virtually all industries, including banking and financial services, food and agriculture, real estate, retail, hospital and healthcare, insurance, commercial carriers/airlines, manufacturing, and entertainment. Many cases were brought on behalf of multiple individuals, and we can expect that trend to continue as the DFEH appears to find multiple-complainant litigation an efficient way broaden its enforcement reach. Inasmuch as the EEOC has used systematic litigation for years as way to grab headlines and pressure employers to change their policies, we can expect the DFEH to follow suit. The DFEH went to trial on some cases, although verdict results are not summarized publicly (the DFEH has not issued any press releases of DFEH jury wins from 2016).

Finally, in that the DFEH’s focus on litigation in 2016 (and 2015) was on disability and retaliation issues in employment and housing, California companies would be wise to review policies and practices on disability accommodation over the next year. Our firm is available to assist in that process and provide recommendations on how to best avoid DFEH scrutiny, and defend any civil action by the DFEH if necessary.

Edited by Colleen Regan.