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Bradley Doucette

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Brad is an associate in the Sacramento office and part of Seyfarth’s Employment Litigation and Government Relations & Policy practice groups.

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By Geoffrey C. Westbrook and Joshua M. Henderson

Just when one might have thought California employment law couldn’t get any stickier for employers, in January 2014 the California Legislature turned up the heat by expanding meal and rest break penalty provisions. Now there’s a new penalty for failure to provide “cool-down,” or recovery, periods to prevent heat illness.

Before, heat illness prevention laws were enforced only by the limited resources of Cal-OSHA. Now, newly amended Labor Code Section 226.7 authorizes private enforcement through class, individual, and multi-plaintiff actions, as well as by the DLSE. Monetary incentives, in addition to ambiguities on many aspects of the law, will likely trigger increased Cal-OSHA enforcement and new litigation, just as the remedies for meal and rest break violations have produced a heat wave of class action litigation. Talk about a scorcher!

But What is a “Cool-down” Period? California employers with “outdoor places of employment” must implement a heat illness prevention program, including allowing and encouraging employees to take a “cool-down rest in the shade for a period of no less than five minutes at a time when they feel the need to do so to protect themselves from overheating.” During these periods, employees must get continuous access to shade and drinking water.

While these obligations existed for almost a decade under Cal-OSHA’s oversight, private enforcement officially began January 1, 2014 with the amendment to Labor Code Section 226.7. Now, “an employer shall not require an employee to work during a meal or rest or recovery period” required by law. As a penalty, employers must pay non-exempt employees one additional hour of pay for each workday in which a meal or rest or recovery period is not provided. Penalties are cumulative, meaning it is now theoretically possible under Section 226.7 for an employer to incur three penalties in a given workday for each affected employee.

So, What are “Outdoor Places of Employment?” This term, not defined in the regulations, may seem self-evident. “Outdoor” really means “out of doors” in an open air environment. But how much time must one spend out of doors to make it a “place” of employment? Reasonable minds could differ here: is 50% of a workday spent outdoors sufficient to trigger the law, or will a mere 25% suffice?

Recovery Periods: A “Hotbed” for Litigation? There are no published decisions yet on cool-down periods, and the law is rife with ambiguities that only litigation will resolve. These uncertainties, and the prospect of penalties that will be very large when considered on a cumulative basis, may prompt private litigants to initiate civil actions against unsuspecting employers in industries with some outdoor work that haven’t traditionally been the focus of enforcement initiatives. These industries may include engineering, warehousing, carwash, outdoor recreation, automotive sales, security, country clubs, valets, summer camps, and janitorial businesses.

The following are areas where employers may face “cooling down” challenges:
Continue Reading Avoid the Summer Heat! Sweat the Details of California’s “Cool-Down” Periods and Avoid the Burn of Wage and Hour Class Litigation

By David D. Kadue and Simon L. Yang

Remember the Black Knight in Monty Python and the Holy Grail? The overconfident fellow who refuses to desist, even after losing four limbs in combat? Some lawyers are like that.

Although the California Supreme Court in Iskanian (June 23, 2014) upheld employer efforts to force waivers of class-action claims in mandatory arbitration agreements, some plaintiffs’ lawyers say that the real take-away from Iskanian is its holding that those agreements cannot be used to waive an employee’s right to bring representative PAGA actions. Moreover, say these lawyers, PAGA actions are particularly potent for plaintiffs because they are categorically unremovable to federal court, thus permitting the plaintiff to remain in more favorable state court.

So does this mean that Iskanian really was a disaster, signaling a new reign of terror for hapless employers who now must confront “gotcha” claims of obscure wage and hour violations while being subject exclusively to the tender mercies of California Superior Court?

Well, perhaps there are a couple of chinks in the Black Knight’s armor.

First, how solid is the dogmatic view about categorical unremovability of PAGA claims? PAGA cases once were routinely removed to federal court under diversity-of-citizenship jurisdiction, where the defendant employer was a non-California citizen and the amount in controversy exceeded the jurisdictional threshold ($75,000 in an individual action or $5,000,000 in a class action, although PAGA claims need not be brought as class actions). The amount in controversy was often easy to establish, as PAGA penalties mount rapidly: $100 per employee per pay period, even if one counts only the 25% of the penalties that go to the employees (75% go to the State of California).

But recent Ninth Circuit decisions dropped flies in the removal ointment. They rejected the efforts of removing defendants, in calculating the amount in controversy, to aggregate the potential individual recoveries of all the employees the plaintiff purported to represent. These decisions now suggest that one should consider only the PAGA plaintiff’s individual recovery, which would be well below $75,000. And the Ninth Circuit has stated, rather elliptically, that the State of California is not a citizen, suggesting that this observation precludes a finding of diversity of citizenship. Hence the basis for a new conventional wisdom that PAGA claims are categorically unremovable. But is this necessarily so?
Continue Reading After Iskanian, What’s Next For Defending PAGA Actions?

By Pam Devata and Dana Howells

Previously in this three-part series, we discussed employer obligations concerning background checks furnished by investigative consumer reporting agencies.  In this third and final segment, we highlight the requirements for California employers who do their own background checks without utilizing the services of a consumer reporting agency. 

Public Records Searches and Disclosure Obligations.  In the Internet age, many types of public records are instantly searchable. Employers who do their own public records searches (either on-line or using old fashioned techniques) must beware of a little-known California law.  Civil Code Section 1786.53(a)  provides broadly that any person who uses personal background information—even information that is a matter of public record—for employment purposes must provide that information to the consumer within 7 days.  “Public records” are defined as records documenting an arrest, indictment, conviction, civil judicial action, tax lien or judgment.

Here’s the most peculiar twist:  the obligation to provide the public records exists regardless of whether the employer obtained actual copies of  public records or simply obtained a verbal summary of the contents.  

By Pam Devata and Dana Howells

Both federal and California law impose additional requirements on the users of “background checks” over and above the requirements for “consumer credit reports.” California’s  most significant peculiarity is that it regulates not only background checks done by a consumer reporting agency, but also background checks done by employers in-house.  In this second part of a three-part series, we focus on California background checks done by an investigative consumer reporting agency.

Employers who use agencies to conduct background checks need a disclosure and authorization under both state and federal law.  However, California’s imposes additional burdens on employers.    

Disclosure Requirements.

Federal Law:  The federal Fair Credit  Reporting Act (the FCRA) imposes requirements on users of “investigative consumer reports.”  Investigative consumer reports are defined by federal law as containing information obtained through personal interviews of neighbors, friends, and other associates about character, general reputation, personal characteristics and mode of living.  

California’s definition is broader.

California Law:  The California Investigative Consumer Reporting Agencies Act’s (“ICRRA’s”) more expansive definition of “investigative consumer report” includes all third party collection of information about character obtained through “any means,” not just personal interviews with acquaintances. This broad definition would  include reference checks performed by a third party.  An employee could argue that any type of background check—other than a pure credit check—is covered by the ICRRA.  In several recent lawsuits, courts have found the ICRRA unconstitutionally vague because criminal background checks concern both credit-worthiness and character.  Therefore, it is unclear whether ICRRA or the less severe California Consumer Credit Reporting Agencies Act is the governing law.

Under California’s ICRRA, employers seeking authorization to procure an investigative consumer report must disclose:
Continue Reading Checking Out Applicants (Part 2): Using Consumer Reporting Agencies for Background Checks

By Colleen Regan

Christmas came early this year to California employers interested in stemming the tide of class action lawsuits asserting wage and hour violations.  On June 23, 2014, three judicial decisions—one by the California Supreme Court and two by the Ninth Circuit—clarified the ability of employers to use arbitration agreements to keep class actions out of court. 

The first, …
Continue Reading Class Action Waivers and Minimum Wage Reminder

By: Kristina Launey and Courtney Bohl

On June 11, 2014, Northern District of California Judge Jon S. Tigar ruled that the California Department of Fair Employment and Housing (“DFEH”) has neither standing nor statutory authority to enforce Title I of the Americans with Disabilities Act (“ADA”).  The decision made clear that while the DFEH has had authority—since January 1, …
Continue Reading Northern District of California Judge Rules DFEH Does Not Have the Authority to Prosecute Violations of Title I of the Americans With Disabilities Act

By Pam Devata and Dana Howells

Complying with the federal Fair Credit Reporting Act (the FCRA) is not easy. Compliance with both the FCRA and California restrictions on credit and background checks is much more challenging. Given California’s extra-strength privacy protections and penchant for workplace regulation, it is not surprising that California has peculiarities when it comes to credit and other background checks.  In Part 1 of a three part blog, we take a dive into credit checks—California style.

California is one of  a growing number of states with laws restricting use of credit history for employment. Effective January 1, 2012, California Labor Code Section 1024.5 generally prohibits the use of credit reports for employment purposes by private sector employers.  If an exception to Section 1024.5 permits an employer to use credit reports, California employers must comply with both the FCRA and the California Consumer Credit Reporting Agencies Act, which are not always congruent. 

Comparing and contrasting the FCRA with the California Consumer Credit Reporting Agencies Act

What FCRA requires—in a nutshell.  Prior to conducting a background check on an applicant or employee through a third party, an employer must:

  • Provide a notice/disclosure to the employee/applicant that the employer will seek a credit report.  The disclosure must be clear, conspicuous, and made in a document consisting solely of the disclosure.  This is a huge area of class action litigation.
  • Supply a copy of  “A Summary of Your Rights Under the Fair Credit Reporting Act.”
  • Obtain written authorization/consent from the applicant/employee. 

Prior to taking adverse employment action against an applicant/employee based, in whole or in part, on a consumer credit report (or investigative consumer report—more about those in Part 2), employers must follow a two-step notification process required by the FCRA:
Continue Reading Checking Out Applicants (Part 1): California Credit Checks

By Dana Peterson and David Rosenberg

In today’s increasingly mobile workplace, employers often require their non-exempt employees to head out of the office for such things as client meetings, off-site events and training.  Understanding when you must pay employees when they’re on the move might help you avoid a train wreck down the road (pun intended.)

The basics.  If you’ve been following our blog with any regularity, the following should come as no surprise: when determining whether travel time is compensable, the applicable California and federal standards differ quite a bit.   For instance, federal law defines “hours worked” as: (a) all time during which an employee is required to be on duty or be on the premises or workplace of the employer, and (b) all time during which an employee is “suffered or permitted to work,” whether or not the employee is required to do so.

By contrast, California defines the term “hours worked” as “the time during which an employee is subject to the control of an employer, and includes all time the employee is suffered or permitted to work, whether or not required to do so.”  I.W.C. Wage Orders, Section 2 (emphasis added).  Therefore, employees must be compensated for time that they are “subject to the control” of the employer, even if they are not “suffered or permitted to work” during that time. 

Enough with the legal jargon, when do I need to pay for travel time?
Continue Reading When Hitting the Road is Hitting your Pocketbook: Travel Time Rules in California

By Brian P. Long

It is a fairly common practice for companies to have non-exempt employees available by phone at the drop of a hat to respond to emergencies and other unexpected business needs.  Yet, if the employee doesn’t actually respond to any phone calls or do anything during that time period, is the company still required to pay them for the mere possibility that their services may at some point be needed?

Any time during which employees are subject to control by the company may be “hours worked,” even though the employees don’t actually perform any work and possibly even if they are able to spend the time doing whatever they choose.

So how do companies know if the employee is under their “control” during on-call/standby time?  Like many other areas of California employment law, whether the answer to this question is yes or no turns on the employee’s specific situation.

There have to be some general rules, right?  Non-exempt employees may be on-call during unscheduled work hours to respond to calls for help from work.  On-call time can be either controlled or uncontrolled, depending on how restricted the employee is in being able to utilize the time for personal pursuits.

To be controlled or uncontrolled: That is the question.  Of course, because this is California, there is no hard and fast rule about how many times an employee’s day or evening must be interrupted or for how long that interruption can last before all of the on-call time (not just the time the employee spent dealing with the interruption) rolls into the controlled category as opposed to uncontrolled.  Factors that are considered include:
Continue Reading On Call vs. On Duty: I’m About to Lose Control and I Think I Like It!

By Chris Crosman

Reporting time pay is one of the provisions of California wage and hour law that is often overlooked by employers.  The requirement to pay reporting time is set forth in Section 5 of all but one of the 17 Wage Orders, and it guarantees workers that they will be paid for at least half of their scheduled …
Continue Reading Time is Money: Reporting Time Rules in California