Seyfarth Synopsis: As of August 30, 2018, California businesses must provide the public with more information about dangerous chemicals present at the business location. Many California employers will comply with the new requirements through the Cal/OSHA-required workplace hazardous communication program. For occupational exposures that do not meet the thresholds for HazMat communications, posting new signs will meet the requirements.

California’s ubiquitous Proposition 65 warnings, which warn the public at large of the presence of known cancer-causing chemicals, are receiving a makeover. Beginning August 30, 2018, regulations enacted by the Office of Environmental Health Hazard Assessment will require businesses to provide “clear and reasonable” warnings regarding Prop 65 listed chemicals. For businesses in general, this new requirement typically will mean displaying signs advising the public of known carcinogens on site. (Technically, California does not require the use of these signs, but they provide a safe harbor for businesses because they are deemed compliant with Proposition 65; it is more risky to rely on a homegrown Prop 65 sign.)

The new signs will display the name of at least one chemical that prompted the warning; convey more directly the risk of exposure for consumer products (e.g., saying the product “can expose you to” a listed chemical, rather than that the product “contains” a chemical); and refer to a website that will provide additional, relevant information.

For employers, however, not much will change. Employers already must warn employees of hazardous exposures, as defined by Cal/OSHA standards, occurring at the workplace. Most employers satisfy that duty by implementing a hazardous communication program that complies with Cal/OSHA standards. Employers may continue to do so under the revised Prop 65 regulations. In that sense, a compliant HazCom program (which already requires information about present hazards, employee training, and the availability of safety data sheets) will continue to provide a safe harbor to employers.

Some occupational exposures to listed chemicals do not trigger HazCom threshold requirements but nonetheless are covered by Prop 65. In those cases, Cal/OSHA still permits employers to use their HazCom program to comply. Employers may choose instead to use the new Prop 65 warning signs.

Seyfarth Synopsis: California enacted its Immigrant Worker Protection Act (IWPA) to make it more difficult for federal immigration enforcement agents to access nonpublic areas of employer worksites and private employee records. The U.S. Justice Department, however, recently persuaded a federal district court to issue a preliminary injunction against IWPA provisions that bar employers from voluntarily providing immigration enforcement agents with access to nonpublic worksites and employee records unless federal authorities present a judicial warrant (to access nonpublic worksites) or an administrative or judicial subpoena (to access employee records). In a recent post on Angelo A. Paparelli’s personal blog, the immigration expert extensively analyzes this development and proposes a response that California might pursue.

Angelo argues that the California Attorney General should try to persuade the Federal Court to lift the injunction against these IWPA provisions. He points out that Congress – when passing the Homeland Security Act of 2002 (HSA) – never authorized the relevant civil and criminal immigration enforcement activities. Instead, the HSA requires the relevant agency to focus solely on adjudicating requests for immigration benefits such as work and visitor visas, asylum status, green cards, and U.S. citizenship. Angelo maintains that the U.S. Citizenship and Immigration Services should respect its lack of enforcement authority and stop sending its investigators to California worksites and stop disrupting businesses and workers in the state.

Seyfarth Synopsis. Pending California legislation would make a mandatory arbitration agreement an unlawful practice under the Fair Employment and Housing Act, and a crime. How could that be consistent with the Federal Arbitration Act?

Under current law, California businesses can insist that employees and contractors enter valid agreements to resolve disputes in front of a neutral arbitrator instead of a judge and jury. These agreements also may waive employee participation in class actions.

California is a repeat offender in making unconstitutional attacks on arbitration agreements. The FAA declares that arbitration agreements are entitled to judicial enforcement to the same extent that contracts generally are. Because federal law thus protects arbitration agreements from discrimination, state laws hostile to arbitration are preempted under the U.S. Constitution’s Supremacy Clause.

Yet California officials have continued to defy this constitutional reality. On no fewer than five occasions the United States Supreme Court has found it necessary to strike down California statutes or judicial decisions that have discriminated against arbitration agreements. California lawmakers nonetheless remain hostile to these agreements and—like Don Quixote tilting at windmills—continue to sally forth against an invincible foe.

The latest quixotic effort comes in the form of Assembly Bill 3080, sponsored by Assembly Member Lorena Gonzalez Fletcher. AB 3080 would forbid businesses to require arbitration in any agreement with an employee or independent contractor entered into on or after January 1, 2019. The bill would prohibit even those agreements that permit an individual to opt out. And the bill has bite: it would amend the FEHA to authorize discrimination lawsuits against businesses that require arbitration agreements, and it would place its substantive provisions within an article of the Labor Code that subjects any violator to criminal prosecution.

Now, we know what you’re thinking: how could such a measure possibly pass constitutional muster, and isn’t the bill so ridiculous that it would never pass in the first place? Take the second question first: Assembly Member Gonzalez Fletcher has repeatedly authored bills that have become law over strenuous objections of the California Chamber of Commerce. Her legislative track record is impressive. And her colleagues in Sacramento are not known for rebuffing the entreaties of the plaintiffs’ bar—who have never much liked arbitration.

As to the federal constitutional issue, however, your question is powerful, as the defenses offered for AB 3080 are unsound. The first defense is that the bill would affect only mandatory agreements (though the bill, in an Orwellian twist, would consider an agreement mandatory even if it provides for an opportunity to opt out of it). This defense ignores the point that courts routinely have invoked the FAA to protect arbitration agreements imposed as a condition of employment. Contracts presented on a take-it-or-leave-it basis—and accepted either formally or through continued employment—are fully enforceable so long as they are not unreasonably one-sided, and arbitration agreements can meet that test. FAA preemption thus applies regardless of whether the arbitration agreement is called “mandatory” or “voluntary.”

The second defense of AB 3080 is likewise disingenuous. This defense notes that AB 3080 does not expressly declare arbitration agreements unenforceable, and suggests that judicial enforceability really is all that the FAA is about. And, this defense continues, “What would be the harm of the new law, anyway? Couldn’t we just wait to see how a court rules on it?”

This defense disregards Supreme Court teaching, which holds that the FAA preempts any state law that “stands as an obstacle” to enforcing arbitration agreements. (It was this rationale that the Supreme Court invoked to foil California’s attempt to ban class-action waivers in arbitration agreements.) AB 3080 would threaten to turn employers into criminals—and to subject them to discrimination lawsuits—merely for making arbitration a condition of employment. How could creating that in terrorem effect for businesses not be creating an obstacle to enforcement of arbitration agreements?

And why should a business be required to risk criminal sanctions or a lawsuit, or both, if it wants to insist that employees and independent contractors agree to a fair form of dispute resolution that is cheaper and quicker than formal litigation?

One might think that persons threatened by encroachments upon their federally protected rights would have the full-throated support of the entire legal community. But not so here, even though AB 3080 would create for California businesses the prospect of civil and criminal actions that would chill the exercise of a federally guaranteed freedom to contract. The constitutional demise of AB 3080—should it become law—is inevitable, once the matter reaches a court. But would the new law’s threats to contracting businesses so discourage arbitration agreements that the issue never gets there?

Perhaps it’s too soon to fret. Recall that Governor Brown, in 2015, vetoed a bill that would have made California the first state to ban arbitration agreements imposed as a condition of employment. He noted that employees in arbitrations enjoy “numerous protections” and that the Legislature’s “far-reaching approach” was one of the sort that courts had struck down in other jurisdictions. He also wanted to await the wisdom of arbitration cases then pending before the United States Supreme Court.

Events since 2015 have only confirmed the view that state laws discriminating against arbitration agreements are unconstitutional. It remains to be seen whether Governor Brown, if presented with a passed version of AB 3080, will use his veto again or will instead leave the defense of mandatory arbitration agreements in the hands of California businesses that are principled and hardy enough to risk civil and criminal sanctions while defending their federal right to contract.

Non-California employers with non-exempt workers who work in California will be interested in the following piece, originally posted on Seyfarth’s Wage Hour Litigation Blog.

Seyfarth Summary: On July 12, 2018, the California Supreme Court agreed to address questions posed by the Ninth Circuit about whether California Labor Code provisions apply to an out-of-state employer whose employees work part of their time in California. Nationwide employers with employees jetting in to work temporarily in California need to return their seats to an upright position and follow this developing story.

Is your business flying high in the current economy? Profits reaching new altitudes? Maybe you have employees residing in one state while working in another. If some work occasionally in California, prepare to fasten your seatbelts for a potentially rough landing. Even if your employees work in California only intermittently (think partial days), and even if your company is not headquartered in the Golden State, the California Supreme Court may soon bring you down to earth.

Background

Traditionally, employers in paying their employees have applied the wage and hour law of the state where the employee sides or most often works, even if the employee occasionally works in another state. In California, however, the rules are peculiar.

In a 2011 decision, Sullivan v. Oracle, the California Supreme Court held that non-California residents working in California for a California-based employer were subject to California daily overtime laws if they performed their in-state work for whole days. Oracle left employers up in the air as to whether California law would apply in other contexts, such as (a) when non-California residents work partial days of work in California, (b) when the employees worked for non-California based employers, or (c) when the wage and hour provisions at issue were something other than the cal-peculiar rules on daily overtime.

The Certified Questions

Which brings us to the current Ninth Circuit cases. Specifically, in three airline cases raising California issues in federal court (two cases against United Airlines, one against Delta), the Ninth Circuit requested the California Supreme Court to address five questions, paraphrased below:

(1) Does the federal Railway Labor Act exemption found in Wage Order 9 bar a wage-statement claim (Labor Code § 226) by an employee who is covered by a collective bargaining agreement?

(2) Does Section 226 apply to wage statements that an out-of-state employer provides to an employee who resides in California, who receives pay in California, and who pays California income tax on her wages, but who does not work principally in California?

(3) Does Section 226 and Labor Code § 204 (governing timely wage payments to current employees) apply to payments that an out-of-state employer makes to an employee who, in the relevant period, works in California only episodically and for less than a day at a time?

(4) Does California minimum wage law apply to out-of-state employers for the California work that their employees perform in California only episodically and for less than a day at a time?

(5) Does California’s peculiar rule preventing pay-averaging for employees paid by commission or piece rate apply to a pay formula that generally awards credit for all hours on duty, but that does not always award pay credit for all hours on duty?

In the underlying lawsuits, United pilots and Delta flight attendants claim that the airlines violated California Labor Code provisions on wage statements, minimum wage, and the timing and completeness of wage payments. United (based in Chicago) and Delta (based in Atlanta) both won at the district court level, successfully arguing that de minimis work within California does not trigger California law, especially when (i) the employers are not based in California, (ii) the employees work only limited amounts of time in the state, and (iii) the employees mostly work in federal air space and in multiple jurisdictions during a single pay period or even a single day.

Why Does This Matter to Employers Based Outside California?

The guidance that the California Supreme Court will issue may ensnare non-California employers in a complex web of Labor Code laws for employees who work in California only sporadically, or who merely stop in California on their way to other work locations. It remains to be seen whether the Supreme Court will stretch to apply California’s peculiar rules on wage statements, daily overtime, and minimum wage to such transitory California work. Or whether California rules on meal and rest beaks, or paid sick time, might also be implicated.

Based on recent emanations from our high court, we would not be surprised to see another extension of California’s employee-protective laws. Any such extension would be highly problematic in light of California’s robust civil and statutory penalties for Labor Code violations. The state’s Private Attorneys General Act authorizes penalty lawsuits brought on a representative basis on behalf of all “aggrieved employees or former employees.” While we do not predict that California will attempt to regulate employment of individuals who merely fly through California airspace, all employers with employees having feet on the ground in California need to sit up, return their tray tables to their original position, and be alert to these pending decisions.

Workplace Solution: The California Supreme Court’s opinion regarding the certified questions will not come down for many months. In the meanwhile, sit back, enjoy the flight, and watch this space for further developments. Feel free to contact your favorite Seyfarth attorney if you would like to discuss.

We are pleased to cross-post with our sister blog, Pay Equity Microblog, the following important and timely blog post regarding the latest in California pay equity legislation.

Seyfarth Synopsis: California Governor Brown signed into law yesterday Assembly Bill No. 2282 to clarify previously passed legislation that prohibits inquiries into an applicant’s salary history. Read on for a recap of Assembly Bill No. 2282.

When AB 168 was signed into law in October 2017, California prohibited employers from asking job applicants for “salary history information.” Under this legislation, California employers must provide “applicants” with the “pay scale” for a position upon “reasonable request.” The law was rather unclear, however, about what each of these three terms meant. On July 18, 2018, Governor Brown signed new legislation, Assembly Bill 2282, designed to clarify those terms and other items in AB 168.

For example, under AB 168, it was not clear whether the term “applicant” meant only external applicants for a position or also current employees applying for the position. AB 2282 clarifies that an “applicant” is an individual who seeks employment with the employer, not a current employee.

Next, it was not clear what information an employer would have to supply when a reasonable request was made for the “pay scale” of a position. AB 2282 defines “pay scale” as a salary or hourly wage range and clarifies that the definition of “pay scale” does not include bonuses or equity ranges.

AB 2282 also clarifies what constitutes a “reasonable request” for pay scale information. A “reasonable request” is defined as a request made after the applicant has completed the initial interview.

Additionally, AB 2282 clarifies that although AB 168 prohibits employers from asking for the applicant’s salary history information, employers may ask about an applicant’s salary expectations for the position.

The new legislation addresses aspects of the California Equal Pay Act as well. It was unclear under what circumstances an employer could use prior salary to justify a disparity in pay. The new legislation attempts to clarify this: “Prior salary shall not justify any disparity in compensation. Nothing in this section shall be interpreted to mean that an employer may not make a compensation decision based on a current employee’s existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors listed in this subdivision.” Those factors are (1) a seniority system, (2) a merit system, (3) a system that measures earnings by quantity or quality of production; and (4) a bona fide factor other than race or ethnicity, such as education, training, or experience.

For Seyfarth’s full 2018 California Legislative Update, please click here.

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