2018 Cal-Peculiarities

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: 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:  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

Seyfarth Synopsis: California is rife with regulation of how employers may obtain and consider background check information for use in hiring and personnel decisions. The relatively new California ban-the-box law (effective January 1, 2018) and the older Los Angeles and San Francisco ordinances and amendments to the California Labor Code set strict rules on when and how employers can consider criminal and credit histories in employment. Many details to follow.

Before 2014, when San Francisco enacted a city-wide ban-the-box law, criminal history background checks were largely unregulated in California, except for a handful of Labor Code provisions that barred consideration of certain types of criminal records. And California employers were stripped of their ability to use credit checks for hiring and other personnel decisions in 2012, by amendments to the Labor Code that restricted the use of credit checks to very narrow circumstances. Los Angeles and the State of California have now joined San Francisco with their own ban-the-box laws, which markedly differ from San Francisco’s.

This blog highlights the laws concerning criminal and credit history background check reports in California, after briefly discussing the decades-old federal Fair Credit Reporting Act (“FCRA”). As the number of class actions alleging FCRA violations continues to skyrocket, it is critical that California employers understand the basics of all laws affecting employment screening programs and determine what changes to policies, forms, and practices will ensure compliance and reduce the risk of claims.

FCRA Basics

Generally speaking, before an employer may obtain a consumer report (aka a “background check report”)—which may include criminal or credit history, from a third-party background check company (“consumer reporting agency” or “CRA”)—the employer must make a clear and conspicuous written disclosure to the individual, in a document that consists “solely” of the disclosure, that a background check may be done. California’s fair credit reporting statute also requires a separate, stand-alone disclosure, which cannot be combined with the FCRA disclosure. The applicant or employee must provide written consent for the employer to obtain a background check report. There are other requirements for “investigative consumer reports” (those based on interviews of the individual’s friends, neighbors and associates) and employers regulated by the Department of Transportation.

Before an employer relies in whole or in part on a background check report to take an “adverse action” (e.g., rescinding a conditional job offer or discharging an employee), the employer must provide the individual a “pre-adverse action” notice, and include with it a copy of the report and the Consumer Financial Protection Bureau’s Summary of Rights. This notice gives the individual an opportunity to discuss the report with the employer before the employer takes adverse action.

Once the employer is prepared to take the adverse action, it must then give the individual an “adverse action” notice, containing certain FCRA-mandated text.

California employers that rely on criminal and credit history information for employment purposes must also consider state and local laws that impose additional compliance obligations, regardless of whether the information is obtained from a CRA.

Employers May Order “Credit Reports” Only for Certain Positions

As noted, California employers have been hampered in their ability to order credit checks since 2012. Labor Code section 1024.5 states that employers, except for financial institutions, may order a credit check only if the individual works (or is applying to work) in certain positions:

  • a managerial position (as defined in California Wage Order 4);
  • a position in the State Department of Justice;
  • a sworn peace officer or law enforcement position;
  • a position for which the employer must, by law, consider credit history information;
  • a position that affords regular access to bank or credit card account information, Social Security numbers, and dates of birth (all three are required), so long as access to this information does not merely involve routine solicitation and processing of credit card applications in a retail establishment;
  • a position where the individual is or will be a named signatory on the bank or credit card account of the employer or authorized to transfer money or authorized to enter into financial contracts on the employer’s behalf;
  • a position that affords access to confidential or proprietary information; or
  • a position that affords regular access during the workday to the employer’s, a customer’s or a client’s cash totaling at least $10,000.

Setting aside state and federal disclosure and authorization requirements discussed above, any California employer that intends to order a credit check on a position identified above must notify the individual in writing why the employer is using a credit report (e.g., the individual is applying for or holds a position that affords access to confidential or proprietary information).

California’s State and Local Ban-the-Box Laws Restrict Use of “Criminal History”

California’s statewide ban-the-box law (Gov’t Code § 12952), as of January 1, 2018, requires employers with five or more employees (subject to few exceptions) to follow certain procedures when requesting and using criminal history information for pre-hire purposes. Specifically, regardless of the source of the criminal history information, employers must:

  • Wait until after a conditional offer of employment to inquire about criminal history, which means asking applicants directly whether they have been convicted of a crime, ordering a criminal history background check, or making any other inquiry about an applicant’s criminal history.
  • Conduct an individualized assessment of an applicant’s conviction to determine whether it has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” Unlike the Los Angeles ban-the-box ordinance (discussed below), the California law does not require employers to provide the applicant with their assessment.
  • Notify the applicant of any potential adverse action based on the conviction history. The notice must identify the conviction, include a copy of any conviction history report (regardless of the source), and state the deadline for the applicant to provide additional information, such as evidence of inaccuracy, rehabilitation, or other mitigating circumstances.
  • After waiting the requisite time period, notify the applicant of any final adverse action, of any existing procedure the applicant has to challenge the decision or request reconsideration, and of the applicant’s right to file a complaint with the Department of Fair Employment and Housing.

In contrast to the FCRA pre-adverse and adverse action notices—required only if the adverse decision is based on information obtained from a background check report from a CRA—the California notices are required even if the employer doesn’t order criminal background check reports from a CRA, but learns of the criminal history from a different source (such as an applicant self-disclosure).

Substantively, a wide range of criminal records are off-limits to California employers (unless the employer qualifies for very narrow exceptions identified in the Labor Code). Records that cannot be used are:

  • arrests that did not lead to a conviction;
  • non-felony marijuana convictions that are older than two years;
  • juvenile records; and
  • diversions and deferrals.

Although complying with California law can be challenging, employers that hire in the cities of Los Angeles and San Francisco must also look to the ban-the-box ordinances in these jurisdictions, which exceed the requirements found in the FCRA and the California ban-the-box law.

The Los Angeles Fair Chance Initiative for Hiring Ordinance

The Los Angeles ordinance, effective January 22, 2017, applies to any “employer” located or doing business in the City of Los Angeles and employs 10 or more employees. An employee is any person who performs at least two hours of work on average each week in the City of Los Angeles and who is covered by California’s minimum wage law. The ordinance also applies to job placement and referral agencies and is broad enough to cover other types of work, including temporary and seasonal workers and independent contractors.

The L.A. ordinance goes beyond California-imposed requirements by imposing the following onerous steps on employers when considering criminal history (regardless of the source):

  • Perform a written assessment that “effectively links the specific aspects of the Applicant’s Criminal History with risks inherent in the duties of the Employment position sought by the Applicant.” The assessment form that contains the relevant factors can be found on the city’s website.
  • Provide the applicant a “Fair Chance Process”—giving the applicant an opportunity to provide information or documentation the employer should consider before making a final decision, including evidence that the criminal record is inaccurate, or evidence of rehabilitation or other mitigating factors. As part of this process, the employer must include with the pre-adverse action notice a copy of the written assessment and any other information supporting the employer’s proposed adverse action.
  • Wait at least five business days to take adverse action or fill the position. If the applicant provides additional information or documentation, the employer must consider the new information and perform a written reassessment, which is at the bottom of the form mentioned above. If the employer still decides to take adverse action against the applicant, the employer must notify the candidate and attach a copy of the reassessment with the adverse action notice.

Los Angeles also states that all solicitations and advertisements for Los Angeles opportunities must state that the employer will consider qualified candidates with criminal histories in a manner consistent with the law.

Moreover, employers must post, in a conspicuous workplace that applicants visit, a notice that informs candidates of the Los Angeles ordinance. Copies of the notice must be sent to each labor union or representative of workers that has a collective bargaining agreement or other agreement applicable to employees in Los Angeles. This notice can be found on the City’s website.

San Francisco’s Fair Chance Ordinance

San Francisco, as of August 13, 2014, became California’s first city to enact a ban-the-box law. Because the new California ban-the-box law provided greater protections to job applicants, the City and County of San Francisco Board of Supervisors (on April 3, 2018) amended the Fair Chance Ordinance (Article 49) to align (in some respects) with the California law. However, employers with five or more employees working in San Francisco that intend to inquire about and consider criminal history (regardless of the source) also must:

  • Provide the applicant or employee with a copy of the Office of Labor Standards Enforcement’s (“OLSE”) Fair Chance Act Notice before inquiring about criminal history or ordering a criminal history background check.
  • Post the OLSE Notice “in a conspicuous place at every workplace, job site, or other location in San Francisco under the Employer’s control frequently visited by their employees or applicants,” and “send a copy of this notice to each labor union or representative of workers with which they have a collective bargaining agreement or other agreement or understanding, that is applicable to employees in San Francisco.” The posted Notice must be in English, Spanish, Chinese, and any language spoken by at least 5% of the employees at the workplace, job site, or other location at which it is posted. The Notice currently is on the OLSE’s website.

Covered San Francisco employers are barred from considering the following types of criminal records (even though these records are not off-limits in other California cities), subject to narrow exceptions: (i) infractions; (ii) convictions that are older than seven years (measured from the date of sentencing); and (iii) any conviction that arises out of conduct that has been decriminalized since the date of the conviction, measured from the date of sentencing (which would include convictions for certain marijuana and cannabis offenses).

California Workplace Solutions

Class actions against employers for failing to follow hyper-technical requirements for background checks have come to dominate the news. Employers in California and elsewhere will want to conduct (privileged) assessments to strengthen their compliance with the myriad laws that regulate use of an individual’s criminal and credit history. Suggested next steps include:

  • Assess coverage under the California, Los Angeles, and San Francisco ban-the-box laws, and California’s law restricting use of credit reports.
  • Review job advertisements and postings both for unlawful and mandatory language regarding criminal history.
  • Review job application and related forms for unlawful inquiries regarding criminal history.
  • Train employees who conduct job interviews and make or influence hiring and personnel decisions, regarding inquiries into, and uses of, credit and criminal history, including best practices for documentation and record retention.
  • Review the hiring process to ensure compliance, including the timing of criminal history background checks, the distribution of mandatory notices, and the application of necessary waiting periods.

Seyfarth Synopsis: Workplace violence is a major concern that can take the form of intimidation, threats, and even homicide. But fret not: California employers can arm themselves with restraining orders, to prevent a modern version of the “Fight Club” at work.

Rule Number 1: If There’s a Workplace Violence Threat, DO Talk About It—In Court

Being at work during a scene reminiscent of “There Will Be Blood” is not an ideal situation. Yet incidents of workplace violence are alarmingly common. According to the Occupational Safety and Health Administration, nearly two million Americans report that they have witnessed incidents of workplace violence, ranging from taunts and physical abuse to homicide. The recent Long Beach law firm shooting by an ex-employee serves as a chilling reminder of what forms such violence can take.

While there is no surefire way to stop unpredictable attacks against employees—whether by a colleague, client, or stranger—California employers can avail themselves of measures to reduce the risk of workplace threats. One such measure is a judicial procedure: a workplace violence restraining order under California Civil Procedure Code section 527.8.

Rule No. 2: Understand What a California Restraining Order Looks Like

A California court can issue a workplace violence restraining order to protect an employee from unlawful violence or even a credible threat of violence at the workplace. A credible threat of violence simply means that someone is acting in such a way or saying something that would make a reasonable person fear for the person’s own safety or that of the person’s family. Actual violence need not have occurred. Many actions short of actual violence—such as harassing phone calls, text messages, voice mails, or emails—could warrant issuing a restraining order.

Restraining orders can extend beyond just the workplace and protect the employees and their families at their homes and schools. A California court can order a person to not harass or threaten the employee, not have contact or go near the employee, and not have a gun. A temporary order usually lasts 15 to 21 days, while a “permanent” order lasts up to three years.

Rule Number 3: Employer Requests Only, Please

The court will issue a workplace violence restraining order only when it is requested by the employer on behalf of an employee who needs protection. The employer must provide reasonable proof that the employee has suffered unlawful violence (e.g. assault, battery, or stalking) or a credible threat of violence, or that unlawful violence or the threat of violence can be reasonably construed to be carried out at the workplace.

So how does an employer request and obtain protection for their employees?

Rule Number 4: Document the “Fight”

The employer must complete the requisite forms and file them with the court. Though the forms do not require it, it often is helpful to include signed declarations from the aggrieved employee and other witnesses.

If a temporary restraining order is requested, a judge will decide whether to issue the order within the next business day, and if doing so will provide a hearing date on a permanent restraining order. A temporary restraining order must be served as soon as possible on the offender. The order becomes effective as soon as it is served. Temporary restraining orders last only until the hearing date.

Rule No. 5: Keep Your Eyes on the Prize at the Hearing

At the hearing, both the employee needing the restraining order and an employer representative should attend. Employers may bring witnesses, too, to help support their case. The person sought to be restrained also has a right to attend, so the employee needing the restraining order should be ready to face that person. If necessary, the employer or the employee can contact the court or local police in advance to request that additional security or protective measures be put in place where there is a threat of harm.

During the hearing itself, the judge may ask both parties to take the stand for questioning. Upon hearing the facts, the judge will either decide to deny the requested order or decide to issue a permanent restraining order, which can last up to three years.

Restraining orders are a serious matter, as employers are essentially asking the court to curtail an individual’s freedom. But such an order is a powerful tool that an employer may find necessary to protect the safety of its employees.

Workplace Solutions: Even though it may relatively easy to demonstrate a credible threat of violence and thus obtain a protective order, know that California courts protect all individuals’ liberty, including their freedom of speech. Obtaining an order to restrain that liberty requires a detailed factual showing. If you have any questions about the process or if this is the right action for you, we highly recommend that you speak to your favorite Seyfarth attorney.