Our readers may be interested in the latest developments concerning California’s sanctuary state laws, and their impact on California employers. Read on for a recent posting on our sister blog: BIG Immigration Law Blog.

Seyfarth Synopsis: The California Legislature, Governor Jerry Brown, and Attorney General Xavier Becerra have aggressively asserted the state’s rights under the U.S. Constitution and traditional police powers to protect all state residents, including undocumented immigrants, from the comparably aggressive immigration enforcement actions of the U.S. Departments of Homeland Security and Justice. This foreseeable clash of federal supremacy versus states’ rights resulted in a recent request by U.S. Attorney General Jeff Sessions in U.S. v.  California for a preliminary injunction against three recent California statutes regulating and reporting on U.S.-California information sharing and the conditions in state detention facilities housing noncitizens (California Assembly Bill AB 103 and Senate Bill SB 54), and limiting the cooperation that California employers may provide to federal immigration enforcement agents (California assembly Bill AB 450). On July 4, 2018 Federal District Judge John A. Mendez issued an order refusing to enjoin AB 103 and SB 54, as well as certain employee-notice rights in AB 450, while granting a preliminary injunction on the rest of AB 450. Proceedings in U.S. v.  California will continue as federal and California authorities continue to clash over other issues such as California’s Evidence-Code ban on disclosure of immigration status in state court proceedings (Senate Bill 785) and federal refusal to provide California with law enforcement grant funding because of its status as a “Sanctuary State.”

The familiar lines were drawn. Combatants clashed in a war of words, competing governance philosophies, conflicting laws, and judicial challenges – all in an age-old constitutional battle of federal power versus states’ rights.

This time around, however, the roles were reversed. Version 2018 is unlike the 1960s when extreme-right southern conservatives, claiming to champion states’ rights, defied but ultimately failed to stop federal efforts to protect civil rights. This time, the state of California passed three statutes under its police powers with the avowed purpose of promoting public safety and protecting undocumented state residents against a determined army of newly-unshackled federal immigration enforcement officers. And this time, the state mostly won.

By enacting three new California laws – Assembly Bills, AB 103 and AB 450, and Senate Bill (SB) 54 – state legislators responded to aggressive federal immigration enforcement activities in the Golden State that they viewed as serious threats to community policing, public safety, and the state’s sizzling, low-unemployment economy.

AB 103 – effective June 27, 2017 – added California Government Code § 12532, directing the state Attorney General to conduct a review and report on county, local, or private locked detention facilities housing noncitizens within the state for civil violations of federal immigration laws. The AG must review and issue a report to the California legislature, Governor and the public by March 1, 2019, and must address conditions of confinement at each facility, due process and care provided to detainees, and the circumstances leading to their apprehension and placement in the facility. To permit this review, AB 103 mandates that the AG be provided with access to each facility, detainees, officials, personnel, and records.

AB 450 – effective January 1, 2018 – the “Immigrant Worker Protection Act” (IWPA), as I wrote in an earlier blog post, “AB 450: California’s Law of Unintended Immigration Consequences” – prohibits California employers (on pain of civil fines) from voluntarily cooperating with federal immigration enforcement agents at the worksite unless cooperation is required by federal immigration law.  Specifically, IWPA prohibits California-based employers from:

  • voluntarily granting immigration enforcement agents access to any non-public areas of a worksite unless the agents present a judicial warrant.
  • voluntarily allowing immigration enforcement agents to access, review, or obtain any employee records unless the agents present a Notice of Inspection (NOI) of Forms I-9 (Employment Eligibility Verifications), an administrative or judicial subpoena, or a judicial warrant requiring compliance.
  • reverifying the employment eligibility of any current employee unless required by federal law.

IWPA also requires employers served with an I-9 NOI to give notice in writing within 72 hours to each current employee at the worksite and any authorized labor union that an I-9 inspection has begun, and notify any affected employee or authorized union rep – again within 72 hours of receiving any subsequent I-9 related federal notices –  “of the obligations of the employer and the affected employee arising from the results of the inspection of I-9 . . . forms or other employment records” (the AB 450 Notice requirements).

Senate Bill (SB) 54 – enacted October 05, 2017, and popularly titled the “California Sanctuary State Law”  – is a comprehensive statute which, among other things, prohibits California law enforcement authorities from sharing a wide variety of information on persons in state custody, including the release date of a detained noncitizen, and from transferring the individual to federal authorities unless he or she has been convicted of certain crimes or unless authorized by a judicial warrant or a judicial probable-cause determination.

Predictably, U.S. Attorney General Jefferson Beauregard Sessions III threw down the gauntlet. The U.S. Justice Department filed a federal complaint in the Eastern District of California, requested a preliminary injunction, offered supporting declarations of senior officials in the State Department (Carl S. Risch) and DHS (Thomas D. Homan, Todd Hoffman and Rodney S. Scott). DOJ attorneys argued to Federal Judge John A. Mendez that these new California laws unconstitutionally usurp federal supremacy and sovereignty over control of the nation’s borders. Not shrinking from the fight, California AG Becerra filed a formal opposition to the request for preliminary injunction, a motion to dismiss the suit, and a legal brief.

Ironically, on Independence Day, Judge Mendez issued his momentous, carefully considered decision (a 60-page whopper), ruling that:

  • No preliminary injunction would issue against AB 103, SB 54, and the AB 450 Notice requirements, because they do not trench upon federal authority over immigration.
  • As for rest of AB 450, California authorities are preliminarily enjoined from:
    • fining employers or otherwise enforcing the bans on reverifying the employment eligibility of current employees,
    • voluntarily giving immigration enforcement agents access to nonpublic areas of the worksite, or
    • allowing them to access, review, or obtain employee records.

Sounding a note of somber exasperation, Judge Mendez implored the two political branches to act:

This Court has gone to great lengths to explain the legal grounds for its opinion. This Order hopefully will not be viewed through a political lens and this Court expresses no views on the soundness of the policies or statutes involved in this lawsuit. There is no place for politics in our judicial system and this one opinion will neither define nor solve the complicated immigration issues currently facing our Nation.

As noted in the Introduction to this Order, this case is about the proper application of constitutional principles to a specific factual situation. The Court reached its decision only after a careful and considered application of legal precedent. The Court did so without concern for any possible political consequences. It is a luxury, of course, that members of the other two branches of government do not share. But if there is going to be a long-term solution to the problems our country faces with respect to immigration policy. it can only come from our legislative and executive branches. It cannot and will not come from piecemeal opinions issued by the judicial branch. Accordingly, this Court joins the ever-growing chorus of Federal Judges in urging our elected officials to set aside the partisan and polarizing politics dominating the current immigration debate and work in a cooperative and bi-partisan fashion toward drafting and passing legislation that addresses this critical political issue. Our Nation deserves it. Our Constitution demands it.

U.S. v. California, Judge Mendez’s case, will continue to final judgment and injunctive orders.  Meantime, however, the federal/California square-off over immigration enforcement is only in the early rounds.  California has just shot additional volleys.

  • The latest California law, SB 785 – enacted with immediate effect on May 17, 2018 – prohibits the disclosure of an individual’s immigration status in open court, unless the party seeking to introduce it first persuades a judge in a private, in camera hearing, that such evidence is relevant and otherwise admissible. SB 785 was enacted in response to recent ICE arrests of immigrants in California courthouses, despite the March 2017 admonition of California Chief Justice, Tani Cantil-Sakauye, AG Sessions and then-Homeland Security Secretary John Kelly, reminding them that:

Our courthouses serve as a vital forum for ensuring access to justice and protecting public safety. Courthouses should not be used as bait in the necessary enforcement of our country’s immigration laws.

  • In State of California, ex rel, Xavier Becerra v. Jefferson B.  Sessions, et al., the state filed a July 9, 2018 motion for summary judgment and legal brief, supported by 13 declarations, requesting a nationwide injunction against imposition of immigration enforcement conditions on federal grants for state and local law enforcement. In a contemporaneous press release, AG Becerra’s office asserted that:

[The U.S. Justice Department has] unlawfully withheld California’s Community Oriented Policing Services (COPS) grant funds, which the State uses to support a task force that combats large-scale drug trafficking. California’s motion seeks to have the court enjoin the federal government’s unlawful conditions for all jurisdictions and compel the issuance of JAG funding to all eligible jurisdictions in the United States that have yet to receive it, as well as to restore COPS funding to California.

* * *

Although Congress apparently has no stomach for comprehensive immigration reform, despite the overwhelming popular view that reform is necessary, the judicial battle between the world’s first and fifth largest economies continues unabated.

Seyfarth Synopsis: As recent triple-digit temps have shown, California is still one of the hottest places to be—literally. Today’s post reminds all employers, especially with employees who work outdoors or in open-air environments, that OSHA, Cal-OSHA, and the California Labor Code all prescribe protections from the heat.

California rest and recovery breaks.

California employers must provide non-exempt employees with a paid 10-minute rest break for every four hours worked or major fraction thereof. Refresh your recollection of the rest-break requirement here. And employers in certain industries should recall their additional obligations to help outdoor workers avoid heat-related illnesses by providing water, shade, and additional rest breaks, as required by California’s regulations.

The heat illness prevention regulations

Who is subject to heat illness prevention regulations? Anyone with outside workers, but the list of industries commonly affected includes:

  • Agriculture
  • Construction
  • Landscaping
  • Oil and gas extraction
  • Transportation or delivery

What does California require regarding outdoor places of employment? Employers must establish, implement, and maintain an effective heat illness prevention plan for outdoor workers. The Department of Industrial Relations offers detailed instructions and tips to help employers comply with state laws. Below are some main concerns:

Drinking Water. In addition to mandatory break periods, employees must have access to potable water that is “fresh, pure, suitably cool, and provided free of charge.”

Shade. If temperatures exceed 80° F, employers must maintain an area with shade at all times that is either open to the air or provides ventilation or cooling.

High-heat procedures. When temperatures exceed 95° F, employees in the industries specifically listed above must be given a minimum 10-minute cooldown period every two hours. These breaks may be concurrent with meal or other rest periods when the timing aligns properly.

What should I do if a worker suffers from heat-related illness? If a worker shows any signs of heat-related illness, a supervisor should be prepared to respond with first aid or other medical intervention—and should not permit a worker showing any symptoms of heat-related illness to resume working until the worker has sufficiently recovered from the symptoms.

Federal OSHA guidance

Federal laws and regulations, of course, also apply in California. The attached Management Alert contains some timely information about the four types of heat illness and what you can do to protect yourselves and your employees from this hazard.

Workplace Solution: Stay aware of the potential for heat illness in the workplace, and the steps needed to reduce the danger. Please feel free to reach out to your favorite Seyfarth lawyer if you have any questions, and as you continue to enjoy the summer.

Seyfarth Synopsis: Employers, take note—the long-awaited, new FEHA regulations related to national origin are about to take effect! Come July 1, 2018, new regulations on national origin under California’s Fair Employment and Housing Act reflect a broad definition of national origin, codify existing case law, and intensify already strict regulations prohibiting harassment, discrimination, and retaliation based on national origin. The regulations will apply to applicants and employees, irrespective of documentation status. (The prior FEHC regulations on national origin addressed only English-only policies and incorporated defenses generally applicable to other protected bases.)

Your Eyes Can Deceive You. Don’t Trust Them.

Whether it’s the sandy dunes of Tatooine, or the lush forest of Endor, everyone has a national origin, even if it’s in a galaxy far, far away. The new regulations, which reflect currently existing California law, expansively define “national origin” to include an individual’s or ancestor’s actual or perceived:

  • physical, cultural, or linguistic characteristics associated with a national origin group,
  • marriage to or association with person of a national origin group,
  • tribal affiliation,
  • membership in or association with an organization identified with or seeking to promote the interest of a national origin group,
  • attendance or participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group, and
  • name associated with a national origin group.

Lest anyone try to find some wriggle room here, the regulations emphasize that “national origin groups include, but are not limited to, ethnic groups, geographic places of origin, and countries that are not presently in existence.” This might mean that your newly married cousin now claiming Wookiee heritage may actually be protected under the new regulations.

Do You Know Droidspeak?

Adhering to case law and statutory provisions, the new regulations address language restriction policies—including English-only policies—only under the very narrow circumstances already set forth in the FEHA:

  • the language restriction is justified by “business necessity,”
  • the language restriction is narrowly tailored, and
  • the employer has told employees about how and when the language restriction applies and what happens to employees who violate it.

The regulations, following the elements set forth in FEHA, define “business necessity” so narrowly that most employers may find it difficult to show. A language restriction is justified by business necessity only where:

  1. the restriction is necessary to the safe and efficient operation of the business,
  2. the restriction effectively fulfills the business purpose it is supposed to serve, and
  3. there is no alternative practice to the restriction that would accomplish the business purpose equally well with a lesser discriminatory impact.

The regulations state that a language restriction is not justified if it either promotes business convenience or is due in part to customer or co-worker preference. In any event, English-only restrictions cannot apply to employees’ non-work time (such as breaks, lunch, unpaid employer-sponsored events).

Discrimination against an employee’s accent may also be national origin discrimination, unless the accent interferes materially with the ability to perform the job in question.

Requiring English proficiency may also be discriminatory, absent “business necessity,” to which the regulations make these factors relevant:

  • the type of proficiency required,
  • the degree of proficiency required, and the nature, and
  • the job duties of the position.

The regulations allow that an employer may ask applicants or employees about their ability to speak, read, write, or understand any language (including non-English languages), but inquiries must be justified by a business necessity.

Aren’t You A Little Short For An X-Wing Pilot?

Giving hope to every Ewok who ever dreamed of being an X-Wing Pilot, the new regulations also clarify (as did prior FEHC selection criteria regulations) that height and weight requirements which create a disparate impact on the basis of national origin are forbidden.

Thus, come July 1, the new regulations clarify and forbid height and weight requirements that disproportionally exclude members of a particular national origin from a position, unless, of course, the requirements are job related and advance a business necessity. Even then, the challenged requirement could be unlawful if the requirement’s purpose could be more effectively achieved with less discriminatory measures.

It is also unlawful for an employer or other covered entity to seek, request, or refer applicant or employees based on national origin to assigned positions, facilities, or geographical areas of employment based on national origin, unless the employers have a “permissible defense” such as job relatedness or a bona fide occupational qualification.

These new regulations apply to undocumented applicants and employees just as they would with any other applicant. Any inquiry into an applicant or employee’s immigration status is unlawful unless there is clear and convincing evidence that the inquiry was needed to comply with federal immigration law.

Wait, I Know That Laugh …

Some FEHA regulations remain unchanged, such as those forbidding discrimination, harassment, and retaliation based upon national origin. The use of derogatory language or slurs based on national origin, and threatening to contact the immigration authorities about an individual’s immigration status also remain unlawful.

Protections for those holding driver’s licenses issued pursuant to Vehicle Code section 12801.9 also remain unchanged. That provision allows those who are not in the country legally to obtain a driver’s license if they can provide valid proof of identity and California residency. Any discrimination against one holding such a license may be considered national origin discrimination under FEHA.

And, in the same vein, employers must not require applicants or employees to present a driver’s license, unless the law requires the license or permits the employer’s requirement. Further, failing to apply the requirement uniformly or for a legitimate business purpose may amount to discrimination because of national origin.

Employers, Take The High Ground:

Employers seeking to limit FEHA exposure should heed these takeaways:

  • National origin is broadly defined to include not just an individual’s national origin, but the individual’s spouse or those with whom the individual is associated, and any person’s perceived national origin.
  • Identify and modify English-only polices to ensure they comply with the strict requirements set out in the regulations.
  • Implement recruitment techniques to safeguard against excluding potential applicants based upon national origin.
  • Ensure that employment is based on objective criteria, to minimize discrimination claims.
  • Remember that customer preference is not a justification for any discrimination based on national origin.

Workplace Solutions: Complying with the new regulations may seem like getting through the Kessel run in 12 parsecs, but with some preparation, and a little help from the Seyfarth force, compliance is certainly manageable. For more advice on how these regulations may affect your business, reach out to your favorite Seyfarth attorney.

Seyfarth Synopsis: It has long been clear that the Americans with Disabilities Act (ADA) and California law protect employees who suffer from alcoholism if it qualifies as a “disability.” Although courts have recognized the right of an employer to have legitimate work rules that prohibit alcohol use in the workplace, the line between having a protected disability and engaging in unprotected conduct is not always clear. The distinction is critical because protected alcoholics may be entitled to reasonable accommodations and leaves of absence under federal and state laws.

With the opioid crisis dominating the news, employers are understandably concerned about the misuse of prescription drugs and the impact that addiction has on their business, employees and the general public. But let’s not forget about alcohol. According to the National Council on Alcoholism and Drug Dependence, 17.6 million people—or one in every 12 adults—suffer from alcohol abuse or dependence, along with several million more who engage in “risky, binge drinking patterns that could lead to alcohol problems.” The Council also reports that workers with alcohol problems are 2.7 times more likely to have injury-related absences, and approximately 24% of workers have admitted to drinking on the job.

The data might be clear, but the solution is not. Workplace alcoholism presents a variety of issues, especially in California, which goes beyond the ADA in protecting alcoholics in recovery. Correctly navigating California’s discrimination and leave laws is crucial not only for helping to avoid litigation, but also for ensuring a safe environment for all employees.

When Is Alcoholism Considered A Disability?

Under the ADA, individuals who abuse alcohol may be considered disabled if the person is an alcoholic or a recovering alcoholic. The California Fair Employment and Housing Act (FEHA) also treats alcoholism as a disability. California liberally defines protected “disability” to include impairments that only “limit” (rather than “substantially limit” as required under the ADA) the ability to work. Of course, both laws make it unlawful for an employer to discriminate against individuals based on the mistaken belief the person is an alcoholic (i.e., “regarding” someone as disabled).

Leave Rules for Alcohol-Related Disabilities

The California Family Rights Act entitles employees to up to 12 weeks of job-protected leave for alcohol-related disabilities. After the 12 weeks, extended leaves of absence may be a further, reasonable accommodation under both California and federal law. Employers may also have to accommodate alcoholic employees when they return to (or remain in) the workplace, which may include granting time off or intermittent leave to attend Alcoholics Anonymous meetings or other support groups.

California’s Labor Code also has a chapter entitled “Alcoholic and Drug Rehabilitation” (Labor Code §§ 1025 to 1028), which requires a private employer with 25 or more employees to accommodate an employee who voluntarily requests to enter and participate in an alcohol rehabilitation program. Such a request may be denied only if doing so would impose an undue hardship on the employer. What is unclear is how many times an employee can request such an accommodation, and whether an employer can require an employee to execute a “Last Chance Agreement” to prevent abuse of Labor Code section 1025. Employers should consider consulting experienced employment counsel before presenting an employee with such an agreement and acting on any violations of it.

So, Can My Company Prohibit Alcohol Use At Work?

All of this said, California law does not prohibit an employer from implementing and enforcing rules regarding alcohol in the workplace.

A guidance memorandum issued by the federal EEOC explained in a hypothetical that if an employee blames her tardiness on her drinking and states that she would like to check in to a treatment center, the employer can discipline the employee for being tardy, but also may have to grant the employee a leave of absence as an accommodation to seek treatment.

The California Labor Code also expressly states that the law does not “prohibit an employer from refusing to hire, or discharging an employee who, because of the current employee’s use of alcohol or drugs, is unable to perform his or her duties, or cannot perform the duties in a manner which would not endanger his or her health or safety or the health or safety of others.”

Even so, employers must tread carefully so as to avoid a claim that any action taken is based on the employee’s protected alcoholism rather than a violation of work rules.

Workplace Solutions:  There is no doubt that alcoholism adversely affects those who suffer from it as well as employers and their businesses. Correctly navigating employment laws governing what you can and cannot do as an employer is challenging. A few points to consider:

  • Establish a policy against alcohol use in the workplace, which addresses when alcohol consumption is permitted or prohibited and highlights the availability of rehabilitation services and any employee assistance program.
  • Educate those responsible for engaging in the interactive process about the proper questions to ask, being careful to avoid questions likely to elicit information about alcoholism, which could be deemed an improper inquiry into someone’s disability. This also could be an issue if an applicant or employee has alcohol-related convictions.
  • Implement a drug and alcohol testing policy that allows for post-accident and reasonable suspicion testing.
  • Educate supervisors and managers about the signs of alcohol use and abuse, and steps for reporting any suspicious behavior. Such training is important for those who will determine whether an employee will be tested based on the reasonable suspicion of abuse.
  • Provide assistance to those suffering from alcoholism instead of discharging them. As mentioned, alcoholism may be a protected disability, thus triggering your duty to engage in the interactive process and to reasonably accommodate an employee suffering from alcoholism.

Seyfarth Synopsis: Information is everywhere, especially in the workplace. But traditional means of securing and sharing data—which typically involve accessing password protected information from various sources—is inefficient, cumbersome, and risky. As old authentication methods are replaced with biometric and blockchain applications, companies will enjoy increased efficiency, security, and cost-savings. But they would be wise to prepare by first understanding the potential legal pitfalls involved.

1.     The Problem

It is no secret that “username” and “password” have become the evil twins of nineties-era data protection. The username and password combinations designed to keep third-parties out often block access to the very users the system was designed to protect. As a result, login credentials are often simplified to increase memorability, or the same credentials are used to access different devices or systems at work and at home. Either way, security is compromised in favor of efficiency. Worse still, the typical solution to this problem involves an added layer of bureaucratic inconvenience: mandatory password changes every 90 days.

The username-password paradigm is also costly. According to Microsoft’s Director of Program Management, Alex Simmons, the company spends over $2 million per month helping people change and recover passwords. And IBM estimates the average cost of a single data breach to be $3.6 million.

2.     Biometric & Blockchain-Based Solutions

Luckily, biometric and blockchain technologies—which have applications far beyond data protection—are already replacing this broken system. Biometrics refers to the measurement and analysis of an individual’s biological characteristics, like one’s face, fingerprint, iris, gait, or ear cavity (which happens to be more unique than a fingerprint). Chances are, you already use biometric data to unlock your phone or car. If you ever call your bank, the odds are high that it uses biometric technology to authenticate your voice. And, as the technology becomes more affordable, employers are using biometric data to record employee hours, protect against fraud, and restrict access to the workplace.

Although biometric authentication promises to reduce costs while increasing convenience, it does not by itself present a silver bullet to the username-password conundrum. Traditional authentication methods that rely on usernames, passwords, driver’s licenses, and social security numbers can be changed or replaced if stolen or compromised. But biometric data is immutable and, as a result, its use in the workplace raises a host of privacy concerns and potentially places employees at a heightened risk of identity theft. While biometric data is more secure than a username and password, biometric data is still data, which can be copied, shared, leaked, and hacked.  As a result, if biometric data is stored on a misplaced thumb drive, anyone who finds the thumb drive could use the data for nefarious purposes. And this exposes a company’s entire system to a single point of failure.

The solution? The blockchain—a decentralized, digitized, distributed ledger. Unlike traditional authentication methods that rely on a single point of access to a centralized database, blockchain secures information by distributing it across a series of digitized “blocks” on a network of unrelated computers or servers (i.e., “nodes”) that are cryptographically linked and secured. In layman’s terms, this means that there is no single point of compromise because you can’t hack one block in the chain unless you hack them all. And that is exceptionally difficult.

When married, biometrics and blockchain are solving the username-password quagmire that costs companies billions. Biometric technology ensures that the user is who she says she is, and that she can access the information she needs with the touch of a finger or blink of an eye. And blockchain technology ensures that her personal data is secure and private, but shareable on a trusted network. The result is an immutable digital identity that enables companies to seamlessly and securely transact with employees and customers.

3.     Legal Issues

There is no shortage of legal issues for companies to consider before rushing into the brave new world of digital identity. California has not yet enacted legislation specifically regulating biometric data. But, Labor Code § 1051 prohibits employers from sharing employee fingerprints and photographs with third parties. And Civil Code § 3344 prohibits the use of a person’s “name, voice, signature, photograph, or likeness” for profit without prior consent. Thus, California employers need to be sure that any biometric data in their possession is secured and not shared outside the company without employees’ consent.

Likewise, the federal government has not yet enacted legislation specifically regulating biometric data. However, in 2012, the Federal Trade Commission recommended best practices for companies using facial recognition technology. And in 2016, the National Telecommunications and Information Administration followed suit. The agencies’ reports stand as helpful reminders that the improper use of biometric data may be actionable under existing law.

Given the highly personal nature of biometric information, companies will also have to contend with a host of privacy laws, most notably the European Union’s General Data Protection Regulation (“GDPR”), which applies to any company that collects, processes, manages or stores the data of European citizens, regardless of where the company is located.

Companies must also be aware of their obligations in the event of a security breach. All 50 states have enacted legislation requiring companies to notify users of security breaches related to personally identifiable information. In California, privacy is constitutionally protected, and the state was the first to enact a data breach notification law. Under Civil Code sections 1798.29(a) and 1798.82(a), companies must notify California residents, including employees, whose “personal information” was, or is reasonably believed to have been, compromised.

Also, in 2015, the California State Assembly introduced A.B. 83, which would have expanded the definition of “personal information” to include biometric data. The Bill would have also required businesses to implement reasonable efforts to protect biometric data from unauthorized access and permitted individuals to file civil actions and recover civil penalties in the event of a breach. While the bill was not passed by the Senate, we can expect it won’t be the last effort to make laws on this in California. Stay tuned to your CalPecs blog for further updates!

Workplace Solutions: Biometric applications are making the workplace more efficient and secure. But, like any new technology, biometrics pose a range of compliance issues as new laws are enacted and regulatory agencies apply existing law to new business practices. Luckily, Seyfarth’s Global Privacy & Security and Blockchain Technology Teams are here to help.

Edited by Coby Turner

Seyfarth Synopsis: Several bills of concern to California employers failed to receive the house of origin blessing and passage by the June 1 deadline, including this year’s attempts at PAGA reform, criminal history inquiries, and medical marijuana accommodations, while a boatload of others, most notably sexual harassment-related bills, sail on. The measures being passed to their opposite house for consideration are described below. 

Friday, June 1, marked the deadline for the state Senate and Assembly to pass bills introduced in their respective houses to the other house. Several employment-related bills (see links at the end of this post) failed to make it out of the house of origin. Many others, detailed below, continue their onward progress toward possible enactment into law. Most notable in number and publicity are the many pending sexual harassment bills. Here’s what is still alive, that we are watching:

Sexual Harassment

AB 1867 would require employers with 50 or more employees to retain records of all internal employee sexual harassment complaints for ten years, and would allow the Department of Fair Employment and Housing (DFEH) to seek an order compelling non-compliant employers to do so. The bill, which would add Section 12950.5 to the Government Code, is scheduled for hearing in the Senate Labor and Industrial Relations Committee on June 13.

SB 1300 would amend the Fair Employment and Housing Act (FEHA) to require a plaintiff who alleges the employer failed to take all reasonable steps necessary to prevent discrimination and harassment to show: (1) the employer knew the conduct was unwelcome, (2) the conduct would meet the legal standard for harassment or discrimination if it increased in severity or became pervasive, and (3) the employer failed to take all reasonable steps to prevent the same or similar conduct from recurring.

This bill would also (a) prohibit an employer from requiring a release of claims or rights under FEHA, or a nondisclosure agreement or other agreement not to disclose unlawful acts in the workplace, in exchange for a raise or a bonus or as a condition of employment or continued employment, (b) require employers, with five or more employees, to provide two hours of sexual harassment prevention training, including bystander intervention training, within six months of hire and every two years thereafter to all California employees—not just supervisors, and (c) prohibit a prevailing defendant from being awarded fees and costs unless the court finds the action was frivolous, unreasonable, or totally without foundation when brought or that the plaintiff continued to litigate after it clearly became so.

SB 1343, which closely resembles SB 1300, would require employers with five or more employees—including temporary or seasonal employees—to provide at least two hours of sexual harassment training to all employees by 2020 and then once every two years thereafter. SB 1343 would also require the DFEH to develop (or obtain) and publish on its website a two-hour interactive online training course on prevention of sexual harassment in the workplace. The bill would also require the DFEH to make the training course, as well as posters, and fact sheets, available in multiple languages (i.e., English, Spanish, Simplified Chinese, Tagalog, Vietnamese, Korean and any other language spoken by “a substantial number of non-English speaking people”).

AB 3080 would prohibit (1) a person from, as a condition of employment or as a condition of entering into a contractual agreement, prohibiting a job applicant, an employee, or independent contractor from disclosing to any person instances of sexual harassment suffered, witnessed, or discovered in the work place; (2) mandatory arbitration of sexual harassment claims; and (3) retaliation against an applicant or an employee who refuses to sign an arbitration agreement. Governor Brown vetoed AB 465 in 2015, which would have prohibited the use of mandatory arbitration agreements as a condition of employment. In his veto message, Governor Brown said he was “not prepared to take the far-reaching step proposed by this bill” and that this sort of blanket ban on mandatory arbitration “has been consistently struck down in other states as violating the Federal Arbitration Act” (FAA). Supporters of AB 3080 have attempted to “preemptively” address such arguments: Floor Analyses cite the ACLU as citing the California Supreme Court’s 2000 Armendariz decision, as well as Civil Code sections 1668 and 3513, to argue that the FAA does not exempt arbitration clauses from general principles that apply to all contracts, and that contracts attempting to exempt people from fraud or illegal activity are unenforceable and against public policy.

AB 3081 would: (1) extend Labor Code prohibitions on discrimination against employees who are victims of domestic violence, sexual assault, or stalking to include employees who are victims of sexual harassment, as well as employees who take time off to assist a family member who is a victim of domestic violence, sexual assault, sexual harassment or stalking; (2) create a rebuttable presumption of unlawful retaliation against an employee if any adverse job action occurs within 90 days of reporting sexual harassment, participating in an investigation, or similar acts; (3) increase the time an employee has to file a complaint with the DLSE for violation of Labor Code section 230 (provides protected time off for jury duty and victims) from one year to three years; (4) require an employer, at the time of hiring and regularly on an annual basis thereafter, to provide to each employee a written notice that includes prescribed information about sexual harassment; and (5) require an employer with 25 or more employees to provide sexual harassment prevention training to all nonsupervisory employees at the time of hire and once every two years thereafter. The bill would also require the Labor Commissioner to create a means for employees to report sexual harassment or assault that occurs in the workplace.

AB 3082 would require the state Department of Social Services (DSS) to develop a policy addressing sexual harassment of in-home supportive services (IHSS) providers and to provide the Legislature with a summary by September 30, 2019. AB 2872 would require the DSS to adopt a peer-to-peer training course for IHSS providers and to ensure that every authorized provider has received at least two hours of peer-to-peer training by December 31, 2019. Beginning January 1, 2020, the bill would require all new or returning IHSS providers to receive at least two hours of peer-to-peer training within their first year of employment.

SB 1038 would make an employee who intentionally retaliates against a person who has filed a complaint, testified, assisted in any proceeding, or opposed any prohibited practice, under FEHA, jointly and severally liable, regardless of whether the employer knew or should have known of that employee’s retaliatory conduct. Previous versions of this bill would have extended personal liability for retaliation, similarly to the liability that already exists for harassment.

AB 2770 would include as “privileged” communications for: (1) complaints of sexual harassment made without malice by an employee to an employer based upon credible evidence; (2) communications between the employer and “interested persons” made without malice regarding the complaint; and (3) non-malicious statements made to prospective employers as to whether a decision to not rehire would be based on a determination that the former employee had engaged in sexual harassment. The bill is scheduled for hearing in the Senate Committee on Judiciary on June 12.

AB 1870 would extend the time an employee has to file an administrative charge with the DFEH alleging an unlawful practice under the FEHA, including, but not limited to, allegations of a sexual harassment, from one year to three years from the alleged incident.

SB 820, the “Stand Together Against Non-Disclosure” (STAND) Act, would make void as a matter of law and public policy provisions in settlement agreements, entered into on or after January 1, 2019, that prevent the disclosure of factual information related to cases involving sexual assault, sexual harassment, sex discrimination, and failure to prevent sex-based harassment and discrimination. The bill would, however, allow such a confidentiality provision to be included upon the request of the claimant unless the opposing party is a government agency or public official; and would allow a provision requiring the monetary settlement payment be kept confidential. Senator Leyva thanked her colleagues when this bill passed the Senate on May 21: “SB 820 shreds the curtain of secrecy that has forced victims to remain silent and empowers them to speak their truth so that we can hopefully protect other victims moving forward.” SB 820 would build on AB 1682, signed into law in 2016, which prohibits confidentiality provisions in settlement agreements in cases involving child sexual abuse or sexual assault against an elderly or dependent adult.

AB 3109 would make void and unenforceable a provision in a contract or settlement agreement, entered into on or after January 1, 2019 that: either (1) waives a party’s right to testify regarding an alleged criminal conduct or sexual harassment by the other party to the contract or agreement in an administrative, legislative, or judicial proceeding; or (2) substantially restrains a party’s right to seek employment or reemployment in any lawful occupation or industry, unless the other party to the contract or agreement is the current or prior employer (except for public employers and a private employer that “so dominates the labor market” so as to effectively restrict the employee from being able to secure employment). The bill is scheduled to be heard in the Senate Committee on Judiciary on June 17.

SB 224 would extend liability for claims of sexual harassment where a professional relationship exists between a complainant and an elected official, lobbyist, director, or producer. This bill (a two year bill introduced in February 2017) has been held at the Assembly desk since January 23, 2018. AB 2338 would require talent agencies to provide to employees and artists, and the Labor Commissioner to provide minors and their parents (prior to issuing the minor a work permit), training and materials on sexual harassment prevention, retaliation, nutrition, reporting resources, and eating disorders. This bill would authorize the Labor Commissioner to charge up to a $25 fee to train each minor, and to impose a $100 fine each time a talent agency fails to provide training, education, or fails to retain specified records. The bill would require a talent agency to request and retain a copy of the minor’s work permit prior to representing a minor.

AB 2079—the “Janitor Survivor Empowerment Act”—would: (1) prohibit the Division of Industrial Relations (DIR) from approving a janitorial service employer’s registration or a renewal that has not fully satisfied a final judgment for certain unlawful employment practices; (2) require the DIR to convene an advisory committee to develop requirements for qualified organizations and peer trainers that janitorial employers must use to provide sexual harassment prevention training; (3) require the DIR maintain a list of qualified organizations and qualified peer trainers and employers to use a qualified organization from the list; and (4) require employers, upon request, to provide an employee a copy of all training materials. AB 2079 builds upon AB 1978 (2016)—the Property Services Workers Protection Act, effective July 1, 2018—which established requirements to combat wage theft and sexual harassment for the janitorial industry.

AB 1761 would require hotel employers to: (1) provide employees with a free “panic button” to call for help when working alone in a guest room that the employee may use, and allow the employee to cease work, if the employee reasonably believes there is an ongoing crime, harassment, or other emergency happening in the employee’s presence; (2) post a notice on the back of each guestroom door informing guests of the panic buttons entitled, “The Law Protects Hotel Housekeepers and Other Employees from Sexual Assault and Harassment”; and (3) provide an employee subjected to an act of violence, sexual harassment or assault, upon request, with time off to seek assistance from law enforcement, legal or medical assistance, and/or reasonable accommodation. The bill would prohibit employers from taking action against any employee who exercises the protections afforded by this bill, and impose a $100 per day penalty, up to $1,000, for a violation of these proposed provisions.

Pay Equity

SB 1284, as presently drafted, is a less onerous version of last year’s effort to mandate annual reporting of pay data a la EEO-1. The bill would require, on or before September 30, 2019, and each year thereafter, that private employers with 100 or more employees submit a pay data report to the DIR. If enacted, the law would require employers to include in the report the following for each establishment, and a consolidated report for all establishments:

  1. The number of employees by race, ethnicity, and sex in the following categories: all levels of officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers; and
  2. The number of employees by race, ethnicity and sex whose earnings fall within each of the pay bands used by the US Bureau of Labor Statistics Occupation Employment Statistics Survey, determined by each employee’s total earnings for a 12-month look-back period, including total hours worked by each employee for part-time/partial-year employment.

Employers that are required to submit the EEO-1 Report could instead submit that report to the DIR. The DIR would maintain the reports for 10 years and make the report available to the DFEH upon request. Non-compliant employers would be subject to a $500 civil penalty for the initial violation and $5,000 for each subsequent violation as well as citation by the Labor Commissioner. The bill would prohibit the DIR and DFEH from publicizing any individually identifiable information obtained through this process but authorize the DIR or the DFEH to develop and publicize aggregate reports based on the information received that are reasonably calculated to prevent association of any data with any business or person.

This year’s Fair Pay Act bill, AB 2282, attempts to clarify some ambiguities in Labor Code sections 432.3 and 1197.5 created by prior pay equity legislation, AB 1676 (2016) and AB 168 (2017). AB 2282 would clarify that “pay scale” means a “salary or hourly wage range,” that “reasonable request” by an employee for a position’s pay scale means “a request made after an applicant has completed an initial interview with the employer,” and that “applicant” or “applicant for employment” means an individual who is seeking employment with the employer and is currently not employed with that employer in any capacity or position. The bill provides that nothing in section 432.3 prohibits an employer from asking an applicant about his/her salary expectation, and that nothing in section 1197.5 should be interpreted to prohibit an employer from making a compensation decision based on a current employee’s existing salary as long as any wage differential resulting from that compensation decision is justified by one or more of the factors specified in the statute. AB 2282 is scheduled for hearing in the Senate Committee on Labor and Industrial Relations on June 13.

Pay Statements: SB 1252 would amend Labor Code section 226 to grant employees the right “to receive” a copy of (not just inspect) their pay statements. This bill is scheduled for hearing on June 20 in the Assembly Committee on Labor and Employment.

Port Drayage Carriers: SB 1402 would require the DLSE to create and post a list on its website of “bad actor” port drayage motor carriers, i.e., companies with any unsatisfied judgments or assessments, or any “order, decision, or award” finding illegal conduct as to various wage/hour issues, including independent contractor misclassification and derivative claims. This bill would extend joint and severable liability to those companies’ customers for future wage violations of the same nature by those drayage motor carriers. This bill is part of a very broad and multi-pronged attack on port drayage motor carriers serving the LA and Long Beach ports, mainly regarding alleged independent contractor misclassification of drivers.

Lactation Accommodations: AB 1976 would ensure employers’ already-required reasonable efforts to provide a room or location for lactation consists of providing something other than a toilet stall or bathroom (by deleting “toilet stall” and inserting “bathroom” in the statute). This bill is scheduled for hearing in the Senate Committee on Labor and Industrial Relations on June 13. SB 937 would more substantively change existing lactation accommodation requirements, by requiring a lactation room to be safe, clean, and free of toxic or hazardous materials, contain a surface to place a breast pump and personal items, contain a place to sit, and have access to electricity. The bill would exempt employers with fewer than 50 employees that can show that the requirement would impose an undue hardship by causing significant expense or operational difficulty when considered in relation to the employer’s size, financial resources, or structure.  SB 937 would allow employers to designate a temporary lactation location, instead of providing a dedicated room, due to operational, financial, or space limitations. SB 937 would require employers to develop and implement a new lactation accommodation policy describing an employee’s right to a lactation accommodation, how to request an accommodation, the employer’s obligation to respond to the request, and the employee’s right to file a complaint with the Labor Commissioner. The bill would also require employers to maintain accommodation request records for three years and to allow the Labor Commissioner access to the records. The bill would require the DLSE to create and make available a model lactation policy and model lactation accommodation request form on the DLSE website, as well as lactation accommodation best practices. The bill would deem a denial of reasonable break time or adequate lactation space a failure to provide a rest period in accordance with Labor Code section 226.7.

Paid Family Leave: 2017 legislation effective January 1, 2018, removed the seven-day waiting period before an eligible employee may receive family temporary disability benefits (under the paid family leave program, which provides wage replacement benefits to workers who take time off work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement). AB 2587 would remove the requirement that up to one week of vacation leave be applied to the waiting period, consistent with the removal of the seven-day waiting period for these benefits.  This bill is scheduled for hearing in the Senate Committee on Labor and Industrial Relations on June 13.

Criminal History: SB 1412, the sole criminal history bill of four still alive, would allow employers to inquire into a job applicant’s particular conviction, regardless of whether that conviction has been judicially dismissed or sealed, under these specified conditions: (1) the employer is required by federal law, federal regulation, or state law to obtain information about the particular conviction, (2) the job applicant would carry or use a firearm as part of the employment, (3) the job applicant with that particular conviction would be ineligible to hold the position sought, or (4) the employer is prohibited from hiring an applicant who has that particular conviction.

Mediation Confidentiality: SB 954 would require that, except in the case of a class action, before engaging in a mediation or mediation consultation, an attorney representing a client participating in a mediation or a mediation consultation must provide the client with a written disclosure containing the mediation confidentiality restrictions provided in the Evidence Code. The bill would require the attorney to obtain a written acknowledgment signed by the client stating that the client has read and understands the confidentiality restrictions. However, an agreement prepared during a mediation would remain valid even if an attorney fails to comply with the disclosure requirement. The bill would also add to the mediation privilege of Evidence Code section 1122 any communication, document, or writing that is to be used in an attorney disciplinary proceeding to determine whether an attorney has complied with the above requirements, and does not disclose anything said or done or any admission made in the course of the mediation.

Immigration Status: AB 2732 would make it illegal—and subject to a $10,000 penalty—for an employer to knowingly destroy or withhold any real or purported passport, other immigration document, or government identification, of another person, in the course of committing trafficking, peonage, slavery, involuntary servitude, a coercive labor practice, or to avoid any obligation imposed on the employer by the Labor Code. This bill would require an employer to post a workplace notice stating the rights of an employee to maintain custody of the employee’s own immigration documents, that the withholding of immigration documents by an employer is a crime, and “If your employer or anyone is controlling your movement, documents, or wages, or using direct or implied threats against you or your family, or both, you have the right to call local or federal authorities, or the National Human Trafficking Hotline at 888-373-7888.”. Further, the bill would require an employer to provide employees with the “Worker’s Bill of Rights,” to be developed by the DIR by July 1, 2019, which would inform employees of the same rights.  Employers would be required to have employees sign the “Worker’s Bill of Rights” and maintain the records for at least three years.

SB 785, which the Governor signed and went into effect immediately May 17, 2018 (to sunset on January 1, 2020), prohibits the disclosure of an individual’s immigration status in open court in a civil or criminal action unless the party wishing to disclose the information requests a confidential in camera hearing and the judge deems the evidence relevant and admissible.

Bills that failed… for now:

The following bills did not survive the house of origin deadline or were struck down prior to the deadline. See our prior legislative update for summaries of these bills.

AB 2016 (PAGA); AB 2482 (Flexible Work Schedules); AB 2946 (DLSE Complaints extension); AB 2366 (Victims of Sexual Harassment); AB 1938 (Familial Status Inquiries); AB 2223 and AB 2613 (Wage Statements); AB 2069 (medical marijuana reasonable accommodation); AB 2841 (paid sick leave increase); AB 2680, SB 1298, AB 2647 (criminal history inquiries).

Stay tuned for our next Legislative update coming around the August 31st deadline for bills to pass both houses and make their way to the Governor’s office.

Seyfarth Synopsis:  June 7, 2018, when the city’s new Paid Sick Leave rules take effect, marks the latest chapter in the City by the Bay’s long history of imposing local employment standards that exceed state requirements. Here’s what you need to know before this latest San Francisco peculiarity begins.

On May 7, 2018, after considering public input on proposed rules to the City’s Paid Sick Leave Ordinance (PSLO), the San Francisco Office of Labor Standards Enforcement (OLSE) published new rules interpreting the PSLO, which is the granddaddy of municipal paid sick leave (PSL) mandates. The OLSE enacted its original interpretative PSL rules in May 2007. More recently, on January 1, 2017, the OLSE amended the PSLO. Now, nearly 18 months later, updated rules will take effect on June 7, 2018. Highlights of some key aspects follow.

Joint Employers

The PSLO broadly defines “Employer” as “any person…who directly or indirectly…employs or exercises control over the wages, hours, or working conditions of an employee.”

The new rules state that if an employee is jointly employed, and at least one employer is covered by the PSLO, each employer must comply with the PSLO. The rules follow California law to determine if an employee is jointly employed. The OLSE notes, by way of example, that joint employment can occur when an employer uses a temporary staffing agency, leasing agency, or professional employer organization. The new rules further state that a “controlled group of corporations” (as defined by the IRS Code), is considered to be a single employer under the PSLO. Employees of unincorporated businesses also are counted as working for one employer if the business satisfies the IRS’s “controlled group of corporations” definition.

Documentation

Under the PSLO, an employer may only take reasonable measures to verify or document an employee’s use of PSL. As stated in the OLSE’s original PSL rules, employers generally can require employees to provide reasonable documentation justifying their use of PSL for absences of more than three consecutive full or partial workdays. The new rules further explain that employer policies requiring a doctor’s note or other documentation when employees use PSL (a) to attend a medical appointment, or (b) in situations of a pattern or clear instance of abuse will be presumptively reasonable even if the use of PSL was for three consecutive workdays or less.

Rate of Pay

The new rules also provide guidance on calculating employees’ rate of pay for used sick leave and generally track the California statewide standards. Like the CA law,  San Francisco’s new PSL rules require different rate of pay calculations for exempt and non-exempt employees. Although the PSLO does not define “regular rate of pay” or “exempt employee,” the new rules defer to the California Division of Labor Standards Enforcement for calculating an employee’s regular rate of pay, and state that an employee’s exempt or non-exempt status is based on whether the employee is exempt from overtime pay under the FLSA and California law. If an individual is exempt, and no other forms of paid leave are provided, the employee must be paid his or her salary without any deduction for sick time taken. However, the time taken can be applied against the employee’s sick leave balance.

Rehired Employees and Breaks in Service

Under the PSLO, employees are entitled to use accrued PSL beginning on the 90th day of employment. For rehired employees, if an employee separates from the employer and is rehired by the same employer within one year, all previously accrued, unused PSL must be reinstated.

In instances where an employee separates from an employer before the 90th day of employment and is rehired within one year, the new rules clarify that the original period of employment is counted toward satisfying the 90-day usage waiting period. For example, if an employee separates from an employer after working for 45 days, and then one month later is rehired, the employee must work another 45 days before the employer needs to permit the employee to use his or her accrued PSL.

Unionized Workforces

The new rules make clear that many PSL practices or policies that have been deemed reasonable in a bona fide collective bargaining agreement (“CBA”) remain so, even if the CBA does not explicitly waive or reference the corresponding PSLO section. This can include practices or policies about notification, verification, increments of time in which paid sick leave must be taken, and sick leave pay rate.

The Upshot

In its introduction to the new rules, the OLSE stated that it was guided by the need to provide clear direction to employers and employees about the PSLO. While these new rules clarify certain gray areas under the PSLO, it remains to be seen whether they will result in further clarification or modifications to the OLSE’s interpretation of the Ordinance.

To stay up-to-date on San Francisco, California, and general Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list.

Seyfarth Synopsis: When must an employer provide leave time in addition to FMLA/CFRA-type leave as a reasonable accommodation? The answer to that question, as with many other leave-related questions, may depend on your location on the map.

Remember that early TV sitcom “Leave It To Beaver,” starring Jerry Mathers as the Beaver? “The Beave” constantly got into trouble and vented his righteous indignation at seemingly arbitrary parental authority. California employers might relate when they try to understand when to grant additional leave to employees failing to return from various protected leaves. Employers can find themselves exasperated by sometimes arbitrary-seeming rules for reasonable accommodation.

“Swell” in the Seventh Circuit

Outside of California, courts have imposed limits on leaves that extend beyond the specific leaves mandated by statute. Take the Seventh Circuit decision in Severson v. Heartland, which held that an employer granting a reasonable accommodation under the Americans with Disabilities Act (ADA) need not grant leave of more than a few weeks beyond an FMLA leave. Part of the rationale for this decision was that requiring employers to provide significant leave beyond an FMLA leave would convert the ADA to a medical leave entitlement statute (see our detailed blog on the decision here).  The U.S. Supreme Court has declined to review Severson.

Severson reflects an interpretation of the ADA that would limit the leave employees would be entitled to in ADA-only jurisdictions.

“Gee Whiz” in California

Within California, courts have approached the issue differently. What should an employer do when an employee has used all mandated leave time? In California, the employer may be required to grant substantially more leave, as a matter of reasonable accommodation.

In Sanchez v. Swissport, Inc. (2013), the appellate court held that where an employee had exhausted her allotted leave under the California Family Rights Act (CFRA) and Pregnancy Disability Leave Law (PDL), the employer had to continue an employee’s leave as a reasonable accommodation under the Fair Employment and Housing Act (FEHA).

Likewise, in Gardner v. Federal Express Corp. (2015), where a driver on leave for a work injury had exhausted his 90-day leave, a federal district court denied summary judgment to the employer on a FEHA claim where a question of fact existed as to whether additional leave would have been a reasonable accommodation.

In deciding if continued leave would be a reasonable accommodation, courts look at whether the leave appears finite, and whether the employee could return to perform essential job functions at the end of the requested leave. Unfortunately, this analysis can pose factual problems for even the most cautious employer, as it can be obscure when (or if) an employee is likely to return.

Be-very Cautious Going Forward

Luckily, there are some limits to extended leave requirements, even in California.

In one leading case, Hanson v. Lucky Stores, Inc. (1999), the Court of Appeal made clear that after an employee’s protected leave entitlement has expired, “a finite leave can be a reasonable accommodation under FEHA, provided it is likely that at the end of the leave, the employee would be able to perform his or her duties.” The Court of Appeal further noted that a “reasonable accommodation does not require an employer to wait indefinitely for an employee’s medical condition to be corrected.”

So there is a limit to how much leave an employer must provide beyond CFRA, FMLA, or PDL-related leaves. Unfortunately, exactly how long the employee can remain off work depends on the specific circumstances. Case law indicates that courts will look to the particular aspects of the business, difficulties in maintaining the employee’s position, and the general outlook of the employee’s ability to return to the position.

In one recent decision, Markowitz v. UPS (2018), the Ninth Circuit upheld summary judgment for an employer, holding that accommodating an employee for twelve months of leave after she had exhausted FMLA leave was reasonable, under the specific circumstances of that particular case.

Workplace Solution: Even though there are limits, the amount of time a California employer must grant FEHA leave in excess of other statutory entitlements is in the gray area of “reasonable accommodation.” Our suggestion is that employers tread cautiously, proceed step by step, evaluate developments as they occur, and consult with counsel at each fork in the road.

Edited by Coby Turner

Seyfarth Synopsis: Given recent headlines, a storm could be brewing over the boundaries of the attorney-client privilege in some parts of the country. California employers can avoid this vortex, at least when dealing with their current and former employees. Both can be part of the “corporate client” for purposes of attorney-client privilege, so long as communications with counsel meet a few requirements.

To provide sound legal advice, in-house counsel often communicate with current and even former employees from all levels of their corporations. Particularly with the storm over the scope of the attorney-client privilege currently raging in Washington, it never hurts to review when employees are “corporate clients” whose communications are privileged and sheltered from disclosure. The last place an employer wants to find itself is in the rain, without an umbrella, when the government or a bombastic plaintiff’s attorney starts poking around for in-house counsel’s communications.

Which Employees Are “Clients?”

California and federal privilege rules treat company employees similarly, but there are some differences. Federal courts, while applying federal-question jurisdiction, apply the well-known Upjohn standard. The Ninth Circuit describes this standard as protecting communications by any corporate employee, regardless of position, when

  • the communications concern matters within the scope of the employee’s corporate duties, and
  • the employee is aware that the information is being furnished to enable the attorney to provide legal advice to the corporation.

California courts apply a different set of factors. In the leading case, D. I. Chadbourne, Inc. v. Superior Court, the California Supreme Court listed eleven “basic principles” to determine when the attorney-client privilege exists in a corporate setting. Chadbourne’s principles overlap somewhat with federal law: (1) the communications must emanate from the employees’ job responsibilities and (2) the employee must understand that the communications are confidential. But Chadbourne adds some additional wrinkles, breaking privileged communications into three categories:

  1. If the employee is a defendant or may be charged with liability because of being employed, statements to in-house counsel relating to the potential dispute are privileged.
  2. In the ordinary course of business, employee communications with counsel are privileged if they “emanate” from the corporation, and the employee is the person who would ordinarily communicate the information to counsel.
  3. If the employee has witnessed an event requiring legal advice, communications with counsel are privileged when the employee is required to report the matter, and the “dominant purpose” for requiring the employee to talk with a lawyer is to provide the lawyer information from the company.

Multi-factor legal tests are not known for the clarity they provide. Chadbourne’s is no different. For instance, what happens if an employee walks into counsel’s office, undirected by a manager, to raise concerns about the job? Is that conversation privileged? The federal standard would suggest that privilege applies, so long as the conversation is confidential and the employee is seeking legal counsel about employment. But the California standard clouds up the legal skyscape. A strict reading of Chadbourne could suggest that privilege attaches only if the employer requires the employee to report conduct, a requirement arguably not met in our hypothetical.

Are Former Employees Ever “Clients?”

California courts have extended attorney-client privilege to some situations involving communication with former employees. Courts recognize the privilege where the corporate lawyer communicates with former employees when (1) matters fall in the former employees’ prior scope of employment, and (2) the lawyer needs to provide legal advice to the company. But corporate counsel again must proceed with caution.

As an initial matter, the privilege as to former employees is narrower than it is as to current employees. For instance, one federal judge interpreting California law refused to extend the privilege to counsel’s fact gathering interviews and deposition preparation with a former employee, as nothing required the former employee to communicate with counsel. The employee did not have a cooperation agreement with his former employer, and the former employee was not the only source of the information the company sought. Many employers could avoid this predicament with a joint-defense agreement with the former employee. But these agreements could come with their own risks, particularly where a potential conflict looms with the employee.

Further, even if the former employee’s communications with corporate counsel are privileged, opposing counsel could contact the employee directly. The opposing side cannot inquire into privileged communications, but there is little in practice that corporate counsel can do to ensure that the former employee does not unknowingly disclose privileged information.

So How Do Employers Avoid Privilege Storms With Their Employees?

Contrary to some high-level publicity on the subject, the attorney-client privilege is not dead. Indeed, it thrives, at least as it exists between California employers and their employees. But to ensure clear sailing, employers communicating with current and former employees should keep some tips in mind, lest they destroy the privilege in a storm of their own making:

  • Always be clear with current and former employees that you do not represent them personally, and that the communications are confidential. Often called “Upjohn Warnings,” the strongest notices to employees (1) make clear that the corporate lawyer does not represent the individual employee, (2) that anything the employee says to the lawyers will be protected by the company’s attorney-client privilege, (3) the employer retains the right to waive the privilege, and, depending on the type of situation, (4) individuals may wish to consult their own independent counsel if they have any concern about potential legal exposure. These warnings often are given in writing.
  • Document that the communication is related to providing legal advice to the company. That the conversation concerned legal issues relating to the company is a requirement for the attorney-client privilege to attach. Proper documentation could help establish the privilege in the event a court ever should question the purpose of the conversation.
  • Limit discussions with current and former employees to matters within the scope of their job duties. Again, this is a requirement for the privilege to attach, and thus, important to document, where feasible.
  • Do not discuss litigation strategy or share work product with the employees. This is a good strategy for all employees, but especially important for former employees because the opposing party in litigation can contact them directly, without going through the company’s counsel.
  • Ensure company policies include provisions reminding employees not to disclose the contents of communications with counsel. This is another opportunity for employers to impress upon employees that communications with counsel are confidential, which is key for the communications to be privileged.
  • Consider having departing employees sign cooperation agreements. Particularly for employees involved in active litigation, or where litigation is possible, having a cooperation agreement in place with former employees will help remove doubt whether they are “required” to provide information to employers, even after their employment ends.

Workplace Solutions: As one can see, navigating the stormy waters of corporate attorney-client privilege can be difficult. If you have further questions about this article, please feel free to contact the author or your favorite Seyfarth attorney.

Edited By: Michael Wahlander

On April 30, 2018, the California Supreme Court issued a long-awaited opinion in which it considered which test should be used to decide whether a worker asserting claims under a California Wage Order is an employee or an independent contractor.  The following Seyfarth One Minute Memo summarizes the case and what it means for employers.

Seyfarth Synopsis: The California Supreme Court, in Dynamex Operations v. Superior Court, held that “engage, suffer or permit to work” determines employee status for Wage Order claims, requiring a defendant disputing employee status to prove (A) the worker is free from control and direction of the hirer in connection with performing the work, both under contract and in fact; (B) the worker performs work outside the usual course of the hiring entity’s business; and (C) the worker customarily engages in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.

The Trial Court Decision

Delivery drivers Charles Lee and Pedro Chevez sued Dynamex Operations West for unlawfully classifying them and 1,800 other drivers as independent contractors. To argue that they were really employees, they cited California’s Industrial Welfare Commission Wage Order No. 9. Their motion for class certification argued that, under Martinez v. Combs (2010), they were employees in that Dynamex knew that they provided services and had negotiated their rates. The trial court certified a class. Dynamex petitioned the Court of Appeal for a writ of mandate.

To view the full alert, please click on the link below:

http://www.seyfarth.com/publications/OMM050118-LE