Seyfarth Synopsis: Employment-related cases pending before the California Supreme Court concern various questions that sometimes seem technical, but the answers they elicit will have big consequences. Questions raised by the current crop of cases include standing to sue, the availability of certain claims and remedies, federal preemption of California laws, what counts as compensable time, and—that perennial favorite—how to interpret the infernal PAGA statute.

We expect the California Supreme Court in 2019 to issue decisions addressing many important issues in private employment. Some topics easily warrant their own article or blog post, and will receive that treatment as the Supreme Court’s decisions emerge. But it’s not too soon to highlight some coming attractions.

Anti-SLAPP and Alleged Employer Motive

  • Is an employer’s anti-SLAPP motion to strike an employee’s suit affected by the employer’s alleged discriminatory motive? In Wilson v. Cable News Network, Inc., the Supreme Court has agreed to decide “whether an employee’s claims for discrimination, retaliation, wrongful termination, and defamation arise from protected activity for purposes of a special motion to strike,” and “what is the relevance of an allegation that the employer acted with a discriminatory or retaliatory motive?”

Application of CA Wage-Hour Law to Out-of-State Employers

  • Does California employment law apply to non-California residents who work in California on a transitory basis? In Ward v. United Airlines and Oman v. Delta Air Lines, the Supreme Court has accepted the Ninth Circuit’s request to address five questions:
    • (1) “Does California Labor Code section 226 apply to wage statements provided by an out-of-state employer to an employee who resides in California, receives pay in California, and pays California income tax on her wages, but who does not work principally in California or any other state?”
    • (2) Does the exemption in Wage Order 9 for collective bargaining agreements (CBA) under the Railway Labor Act bar a wage statement claim brought under California Labor Code section 226 by an employee who is covered by such a CBA?
    • (3) “Do California Labor Code sections 204 and 226 apply to wage payments and wage statements provided by an out-of-state employer to an employee who, in the relevant pay period, works in California only episodically and for less than a day at a time?”
    • (4) “Does California minimum wage law apply to all work performed in California for an out-of-state employer by an employee who works in California only episodically and for less than a day at a time?”
    • (5) “Does the Armenta/Gonzalez bar on averaging wages apply to a pay formula that generally awards credit for all hours on duty, but which, in certain situations resulting in higher pay, does not award credit for all hours on duty?

Arbitration

  • When is an arbitration remedy broad enough to preclude an employee’s resort to a Berman hearing? Under existing law, employers cannot necessarily compel employees to arbitrate wage claims unless and until employees have had the chance to bring those claims before the Labor Commissioner in a “Berman hearing.” In OTO, L.L.C. v. Kho, the Supreme Court has agreed to decide these issues:
    • “(1) Was the arbitration remedy at issue in this case sufficiently affordable and accessible within the meaning of Sonic-Calabasas A, Inc. v. Moreno (2013) … to require the company’s employees to forego the right to an administrative Berman hearing on wage claims?
    • (2) Did the employer waive its right to bypass the Berman hearing by waiting until the morning of that hearing, serving a demand for arbitration, and refusing to participate in the hearing?”

Compensability

  • Does an employee engage in compensable work while waiting for the employer to inspect a bag the employee chose to bring to work? In Frlekin v. Apple, Inc., the Supreme Court has accepted the Ninth Circuit’s request to decide this issue: “Is time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages or bags voluntarily brought to work purely for personal convenience by employees compensable as ‘hours worked’ within the meaning of California Industrial Welfare Commission Wage Order No. 7?”
  • Is walking to and from a time clock compensable hours worked? In Stoetzl v. State of California, the Supreme Court has agreed to decide this issue: “Does the definition of ‘hours worked’ found in the Industrial Wage Commission’s Wage Order 4, as opposed to the definition of that term found in the federal Labor Standards Act, constitute the controlling legal standard for determining the compensability of time that correctional employees spend after signing in for duty and before signing out but before they arrive at and after they leave their actual work posts within a correctional facility?”

Liability for Wage Payment

Preemption—By the FAA and the LMRA

  • Is a PAGA suit for unpaid wages immune from arbitration? In its 2014 Iskanian case, the California Supreme Court acknowledged that the Federal Arbitration Act (FAA) preempts state laws against class-action waivers in arbitration agreements, but also held that representative PAGA actions are not subject to mandatory arbitration. Now, in Lawson v. Z.B., N.A., the Supreme Court has decide to whether a representative action under PAGA, seeking recovery of individualized lost wages as civil penalties under Labor Code section 558, falls within the preemptive scope of the FAA.
  • Does federal labor law preempt a claim for termination wages? In Melendez v. San Francisco Baseball Associates, the Supreme Court has agreed to decide this issue: “Is plaintiffs’ statutory wage claim under Labor Code section 201 subject to mandatory arbitration pursuant to section 301 of the Labor Management Relations Act because it requires the interpretation of a collective bargaining agreement?”

Remedies

  • Can an employee seeking unpaid wages use the tort of conversion? In Voris v. Lampert, the Supreme Court has agreed to decide this issue: “Is conversion of earned but unpaid wages a valid cause of action?”

Rest Breaks & Meal Periods

  • Rest breaks for ambulance attendants on 24-hours shifts. In Stewart v. San Luis Ambulance, Inc., the Supreme Court accepted the Ninth Circuit’s request to decide these issues: (1) “Under the California Labor Code and applicable regulations, is an employer of ambulance attendants working twenty-four hour shifts required to relieve attendants of all duties during rest breaks, including the duty to be available to respond to an emergency call if one arises during a rest period?: (2) “Under the California Labor Code and applicable regulations, may an employer of ambulance attendants working twenty-four hour shifts require attendants to be available to respond to emergency calls during their meal periods without a written agreement that contains an on-duty meal period revocation clause? If such a clause is required, will a general at-will employment clause satisfy this requirement?” (3) “Do violations of meal period regulations, which require payment of a ‘premium wage’ for each improper meal period, give rise to claims under sections 203 and 226 of the California Labor Code where the employer does not include the premium wage in the employee’s pay or pay statements during the course of the violations?”

Standing for PAGA Claims

  • Can a PAGA plaintiff settle his individual wage and hour claims and still pursue his PAGA action as an “aggrieved employee”? In Kim v. Reins International California, Inc., the Supreme Court has agreed to decide whether an employee bringing an action under PAGA loses standing to pursue representative claims as an “aggrieved employee” by dismissing his or her individual claims against the employer.

Workplace solution. Some of the issues raised by the above cases may seem relatively minor, technical, or limited to particular industries. Yet many a significant class action has turned upon issues no more monumental. We will keep our eyes and ears on the Court’s progress and keep readers updated with the latest developments.

Seyfarth Synopsis: Even if bad Glassdoor reviews have you feeling like you need to fight back, employers should stay out of the ring, and instead implement social media policies that clearly define prohibited behavior and disclosures, while spelling out the consequences for violations. Employers must not retaliate against employees for their lawful out-of-office behavior.

People are used to sharing everything about their lives—from what they ate for breakfast to the funny name on their Starbucks Frappuccino. But this behavior can be scary for employers when current and former employees take to social media to complain about their jobs—or even defame their boss. Of particular interest are online platforms such as Glassdoor, which purport to provide “inside” information about working conditions, salaries, and company culture.

So what can an employer do when an employee posts a negative comment on Glassdoor about the company? The answer is … not much. The law often protects an employee’s off-duty speech. But the law does not protect defamatory speech, and it does not protect the disclosure of confidential, protected information. So proactive employers can take steps to make sure they are not unfairly smeared online and that their trade secrets are protected. We have a few suggestions in that regard.

What Are You Tryin’ To Prove: Don’t Get In The Ring

Websites such as Glassdoor, which has about 30 million monthly users, allow current and former employees to criticize or praise a company, typically through anonymous posts. Though many such sites screen critiques to prevent the posting of offensive comments and those that would disclose private information, they nonetheless present a conundrum for employers: Do you ignore criticism—even if it’s false—or do you respond to it? The former tactic can permit damage to an employer brand to go unchecked; the latter can make an employer look defensive.

In this new age of information, job applicants search employer review sites for information about companies. Responding to a negative review can help your brand if you do so in a way that shows the organization is genuinely committed to improving. But a response could also provide more fodder for further negativity, so it’s best to try to get ahead of the problem by making changes in-house, if necessary.

If your employees are posting on social media outside of working hours, California’s constitutional right to privacy can protect them from retaliation. Labor Code section 96(k) protects employees where they have engaged in lawful conduct asserting “recognized constitutional rights,” such as free speech postings on social media, occurring during nonworking hours away from the employer’s premises. A better avenue is to get ahead of the problem and educate employees about what they can and can’t post online about the company.

Put Your Robe On—And Implement a Social Media Policy

You can restrict free speech online for current employees with a social media policy (but only up to a point!). Employers should have a social media policy that prohibits posting confidential information about the company (and perhaps about posting anything about the company at all) without permission from the company’s public relations group. Every employee is required to follow the company’s legally compliant policies even if they are stricter than what the law would otherwise allow. If an employee violates your policies, that employee could be subject to employment discipline up to and including termination.

That said, there are limits to the restrictions employers can place on what employees can say about them online. The National Labor Relations Act protects the rights of workers to discuss wages and working conditions with other workers. These protections apply to posts on social media, so your social media policy cannot prevent employees from communicating with other employees online about the company’s pay or working conditions, such as might be the case with a Glassdoor review.

For example, in analyzing one company’s social media policy that forbade employees from making anonymous posts about the company online, the NLRB’s general counsel found that “requiring employees to publicly self-identify in order to participate in protected activity imposes an unwarranted burden on Section 7 rights [of the National Labor Relations Act]. Thus, we found this rule banning anonymous comments unlawfully overbroad.”

You Never Got Me Down—Employers’ One-Two Punch Combo for Dealing with Social Media

  • It is prudent for employers to prepare and implement a social media in the workplace policy in order to avoid risks of disclosure of confidential and proprietary information and claims of cyberbullying, harassment, and discrimination.
  • Social media policies should clearly articulate the legitimate business interests the employer seeks to protect, as well as provide clear definitions of prohibited behavior and private and confidential information, and spell out the consequences for violations of the policy.
  • Employers should use caution when disciplining employees based on social networking activities, as certain union and nonunion employee rights need to be considered.
  • An employer may discipline an employee for posting negative comments on a social networking site if the employee’s comments are offensive or inappropriate, and not related to employment issues, and should do so on a consistent basis.

Workplace Solutions: Employers should open up a dialogue with employees about social media and encourage them to bring grievances to Human Resources, instead of airing their grievances online. Employers should also avoid retaliating against employees for posting on social media outside of work hours, and implement social media policies that clearly articulate the penalties for posting confidential information, and any defamatory statements.

Edited by Coby Turner

Seyfarth Synopsis: As Californians grow tragically familiar with wildfire, California employers face another threat of fire in the form of defamation lawsuits. The rapidly burning #MeToo anti-harassment movement, and constant talk in the news about peoples’ reputations being destroyed, has rained down fire and fury for California employers forced to consider possible defamation lawsuits by current or former employees.

Stoking the Fire: How Defamation Lawsuits Begin

Workplace defamation lawsuits can flare up in various ways: the administration of performance reviews, background and reference checks, and conducting workplace investigations. But the fires often burn fiercest in the context of harassment lawsuits. In defending a workplace harassment lawsuit, employers must use caution in making any statement about the litigation that could harm a plaintiff’s reputation, particularly where it comes to providing employment references. Employers who fail to do so put themselves at risk of permitting a rumor mill that sets themselves up for a defamation lawsuit.

Red, Orange, and Yellow Flames: Standards for Defamation, Libel, and Slander

Under California law, defamation is a false statement made about another person that harms the person’s reputation. California, unlike some states, has separate standards for written defamation (libel) and oral defamation (slander).

Usually a defamation plaintiff must prove damage to profession or occupation, but sometimes the statements are so controversial that the words alone are deemed to cause harm. A false statement that an employee “sexually assaulted” another employee might fall into that category, as might a false statement that an employee “colluded with a competitor,” as these statements might imply an individual is professionally unfit.

In the workplace (and especially in the harassment context), statements are more likely to damage a person’s profession or occupation because they will likely relate to the person’s reputation.

What Can I Do If a Fire Catches?

Here are three situations that could spark a defamation claim and what employers can do to douse any flame:

  1. An employee volunteers that you disciplined a former employee for sexual harassment, when talking to a prospective employer for the former employee.
    • Solution: Have a written policy that restricts what your company will tell prospective employers of your former employees. Do not provide substantive information regarding an employee’s reasons for leaving your company, and provide that all inquiries go to Human Resources and limit HR’s responses to the former employee’s job title and dates of employment.
  2. A supervisor emails another supervisor that an employee seeking to transfer to another department is “stupid and crazy.”
    • Solution: Train supervisors on appropriate language to use in the workplace and while providing coaching or performance improvement plans to employees who are struggling in their job performance.
  3. A company representative posts on Facebook that a former employee’s actions were “felonious” after the employee sues the company for retaliating against him for whistleblowing.
    • Solution: Instruct company representatives to refrain from posting on social media or making statements to the media regarding any pending lawsuit against the company.

Extinguishing the Fire: An Employer’s Potential Defenses

As long as the statement was not made to purposely harm a person’s reputation and it was not known to be false, employers have an arsenal of affirmative defenses with which to combat defamation fires. These defenses include:

  • Truth,
  • Consent,
  • Qualified Privilege—applying to communications to others expressing concerns on matters of common interest (e.g., job references to other employers), and
  • Absolute Privilege—applying to communications made in certain legal proceedings or in certain reports of crimes to the police.

Workplace Solutions: Fire Prevention 101

In preventing defamation suits stemming from harassment lawsuits, employers should never overlook the importance of maintaining a fire-proof anti-harassment policy. Should a harassment lawsuit arise, employers should ensure that representatives and supervisors exercise caution in making statements about current or former employees. If you have any questions or concerns, your friendly California Seyfarth firefighters are here to serve and protect.

Edited by Coby Turner

Seyfarth Synopsis: California voters gave the green light to recreational use of marijuana with the passage of Prop 64. Marijuana users may have felt like they struck Acapulco Gold, but a review of the law on drug testing in the workplace may turn out to be a buzzkill.

California highway sign with marijuana leafWhen can an employer drug test its employees?

Last November, California voters passed Proposition 64—the Adult Use of Marijuana Act. The new law permits individuals over the age of 21 to possess up to one ounce of marijuana or eight grams of marijuana concentrates. California households, regardless of how many people reside there, can grow up to six plants at a time.

But Prop 64 also expressly protects an employer’s right “to enact and enforce workplace policies pertaining to marijuana.” In other words, despite Prop 64, employers may still prohibit their employees from using the sticky icky. This good news for employers who want to maintain drug-free workplace policies may leave some employees dazed and confused.

Employers have had the right to narrowly craft drug testing policies to meet their needs. Reinforcing that right are Prop 64’s drug-free workplace carve-out and the fact that ganja use remains illegal on the federal level. It remains the case, however, that drug testing may affect an employee’s privacy rights, which create limits on when an employer may drug test.

California courts have used a balancing test to determine whether a drug test is legal for existing employees. Courts weigh the employer’s basis for testing versus the employee’s expectation of privacy. The nature of the test, the equipment used, the manner of administration, and its reliability are factors a court may consider in determining whether a drug test is permissible.

If an employer has an objectively reasonable suspicion that an employee is using drugs, then a drug test is likely permissible, especially when there is a threat to workplace safety. California employers generally have authority to eradicate potential harm to their business and their employees’ safety.

Note: Stay tuned for next week’s blog post on random drug testing by employers.

How should the employer notify employees about its drug testing policy?

If an employer plans to drug test, it should distribute to employees a clear drug policy before employees are subject to testing. The policy should explicitly prohibit the use of marijuana and notify employees of the circumstances in which a drug test would occur. This type of notice may decrease a drug testing program’s intrusion on an employee’s privacy interests.

Some employers may choose to educate employees about how marijuana lingers in one’s body beyond the time the “high” wears off. Because cannabis remains in a person’s system longer than other drugs, it’s possible for an employee to test positive for marijuana use that occurred during non-working time. A marijuana test, unlike an alcohol test, will not indicate whether the test subject is under the influence at the time of the test. Rather, a drug test may show THC in the bloodstream that has resulted from marijuana use days, weeks, or even months before the day of the test.

Under the federal Controlled Substances Act, marijuana continues to be a Schedule I controlled substance whose use and possession is illegal. For that reason, employers remain within their rights to maintain drug free-workplaces that exclude marijuana. In addition, federal contractors, under the federal Drug-Free Workplace Act, must establish drug-free workplaces.

Employers generally have the right to institute an Employee Assistance Program (EAP), which allows an employee who has failed a drug test to attend an assistance program to help curb a substance abuse problem, or to place an employee in a supervised position and withhold certain privileges during a probationary period. Whatever policy an employer enacts, the policy should give employees clear expectations about the situations in which the employer will exercise its right to conduct a drug test for cause.

Is an employer exposing itself to risk by drug testing employees?

Drug testing employees may give rise to claims by employees for disability discrimination, invasion of privacy, and defamation. In addition, employers who fail to uniformly apply drug testing policies risk exposure to a discrimination suit under the Fair Employment and Housing Act. An employer must not single out protected categories of employees for drug testing.

How can Seyfarth help?

Employers should assess their written policies, and training and education of employees to ensure compliance with California’s drug testing laws. Seyfarth’s Workplace Solutions Group is ready and willing to help to make sure your company is in compliance.

Edited by Chelsea Mesa.