Seyfarth Synopsis: From Mark Zuckerberg to the mayor of Stockton, the concept of Universal Basic Income is catching fire. What is this newfangled concept, and what can employers expect in the new emerging economy?

UBI – What Is It?

Universal Basic Income—“UBI”—is a form of social security, or a citizen’s stipend, to ensure everyone with a basic income from the state. The idea is to provide a basic degree of economic security: the recipient need not work or look for work, and the payment would come regardless of the individual’s other income. Countries like Finland and Canada have started to test UBI programs in certain jurisdictions, with some success.

Although the idea of UBI dates all the way back to the 18th century, the idea has received a lot of attention and support recently. Numerous Silicon Valley big game players have embraced the concept. Mark Zuckerberg of Facebook fame advocated for the concept during his Harvard commencement speech in 2017. Elon Musk of Tesla fame is another big supporter, opining recently that “we’ll end up doing universal basic income. It’s going to be necessary.”

Why has the concept been so revitalized? It all comes down to the future emerging job market. Elon Musk was very clear on this point: “there will be fewer and fewer jobs that a robot cannot do better. I want to be clear. These are not things I wish will happen; these are things I think probably will happen.” Indeed, back in March 2017, former President Barack Obama warned Congress that several reports found that as much as 50% of jobs could be replaced by robots by 2030. If that truly is the case, the diminished capacity for human workforce will leave many people without a job, and therefore without any other form of income.

Stockton Economic Empowerment Demonstration

It all seems very futuristic and distant—until we realize that UBI is already being tested right here in California! And, where better than in Stockton, California? Stockton has already faced great economic difficulty: as a city plagued by a loss in job opportunities and low wages, it even had to declare bankruptcy in 2012.

Beginning in the second half of 2018, the Stockton Economic Empowerment Demonstration (SEED) will pay $500 a month to a few hundred lower-income individuals. The money will come with absolutely no strings attached and will originate from the Economic Security Project (an organization aiming to raise awareness on UBI in the United States).

Stockton Mayor Michael Tubbs, Stockton’s youngest mayor in history, has been a prominent supporter of the program, seeing it as a way to alleviate some of the poverty pains the city has been experiencing with the growth of Silicon Valley and an increasingly heavy reliance on automation. The hope is to track the benefits of the distributions and use this as a pilot program for potentially expanding its use in other areas of California. Indeed, this hot topic of UBI is regularly discussed already by California state legislators and by gubernatorial candidates in California’s 2018 election.

What Does It All Mean?

Should we all just kick our shoes off and wait for the money to roll in? Probably best not to. UBI is meant to provide some security, but is in no way meant to replace working entirely. The program is just in its initial testing stages, and it is impossible to predict with any assurance the benefits and costs of running a UBI program on a larger scale.

Some studies indicate that people receiving a UBI would likely keep some form of employment, or take on part-time work. Indeed, researchers found that rather than decreasing employment, in areas using UBI, people in part-time work increased by a significant 17%. Like the surge of independent contractors in the new and emerging “gig economy,” employers could see a shift in the type of workers, particularly in low-wage positions that UBI tends to affect, and their expectations for benefits, flexibility, and pay.

Workplace Solutions:

So what should we do? In the emerging futuristic world we live in, keep an eye on the future of work. Team Seyfarth will keep an eye out and keep you abreast of this bizarre new world. Check out our wonderful future employer initiative. Meanwhile, if you have any queries, your friendly Seyfarth attorney is always happy to be your guide.

Edited By: Coby Turner

Seyfarth Synopsis: New statutory obligations for California employers in 2018 will include prohibitions on inquiries into applicants’ salary and conviction histories, expanding CFRA to employees of smaller employers, expansion of mandatory harassment training to include content on gender identity, gender expression, and sexual orientation, and new immigration-related restrictions and obligations.

California Governor Jerry Brown spent his last day to sign bills in this Legislative Session, October 15, approving and rejecting a number of employment-related bills. Below is our annual summary of those bills that will have—or would have had—the greatest impact on California employers. All approved bills become effective January 1, 2018, unless stated otherwise. Watch this blog for in-depth pieces on the bills below that will pose the most challenges for employers.

APPROVED

Salary Inquiry Ban. After two unsuccessful attempts, AB 168 received the Governor’s approval to make it unlawful in California law for employers, including state and local governments, to ask applicants about their prior salary, compensation, and benefits. The employer may consider prior salary information the applicant voluntarily and without prompting discloses, in setting pay. Don’t forget that Labor Code section 1197.5 already prohibits an employer from using an applicant’s salary history, by itself, to justify a pay disparity. AB 168 will also require employers to provide the position’s pay scale to a job applicant upon reasonable request. Read our in-depth piece on AB 168, and practical implications, here. Adds Section 432.3 to the Labor Code.

Meanwhile, yesterday the Governor vetoed the other pay equity bill we were watching, Gender Pay Gap Transparency Act, AB 1209. More on that bill below.

Ban-the-Box: Prior Conviction History of Applicants. With the approval of AB 1008, the Governor and California Legislature have created yet another protected class of individuals entitled to sue employers under the Fair Employment and Housing Act: applicants denied employment because of their conviction history, where the employer is unable to justify relying on that conviction history to deny employment. AB 1008 makes it unlawful for an employer to include questions seeking disclosure of an applicant’s criminal history on any employment application, inquire or consider the conviction history of an applicant before extending a conditional offer employment, or consider or distribute specified criminal history information in conducting a conviction history background check. If an employer intends to deny a position solely or in part because of the applicant’s prior conviction, the employer must make an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the duties of the job, consider certain topics, and allow the applicant to dispute the accuracy of the conviction history. Read our in-depth analysis, implications, and tips, of the “Scarlet Letter Act” here. Adds Section 12952 to the Government Code, and repeals Section 432.9 of the Labor Code.

New Parent Leave Act and Parental Leave DFEH Mediation Pilot Program. SB 63 extends CFRA’s protections to smaller employers (with at least 20 employees within 75 miles) and prohibits those employers from refusing to allow employees—with more than 12 months and at least 1,250 hours of service—to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. An employer employing both parents who both are entitled to leave for the same child does need not give more than 12 weeks of leave total to the employees (which may be granted simultaneously if the employer chooses). Further, an employer can recover the costs of maintaining the health plan for employees that do not to return to work after their leave exhausts because of a reason other than a serious health condition or other circumstances beyond the employee’s control. Beginning January 1, 2018 and ending January 1, 2020, the DFEH, after receiving funding from the Legislature, will create a parental leave mediation pilot program under which an employer may request all parties to participate in mediation within 60 days of receiving a right-to-sue notice. This bill prohibits an employee from pursuing any civil action under these provisions (and tolls the statute of limitations) until the mediation is complete, meaning when either party elects not to participate, withdraws from mediation, or notifies the DFEH that further mediation would be fruitless. Adds Section 12945.6 to the Government Code.

Retaliation: Expanding The Labor Commissioner’s Authority. With the Governor’s October 3 approval of SB 306, the DLSE will be authorized to investigate an employer—with or without a complaint being filed—when, during a wage claim or other investigation, the Labor Commissioner suspects retaliation or discrimination. The bill will also allow the Labor Commissioner or an employee to seek injunctive relief (that the employee be reinstated pending resolution of the claim) upon a mere finding of “reasonable cause” that a violation of the law has occurred. That injunctive relief, however, would not prohibit an employer from disciplining or firing an employee for conduct that is unrelated to the retaliation claim. The bill also authorizes the Labor Commissioner to issue citations directing specific relief to persons determined to be responsible for violations and to create certain procedural requirements. Amends Section 98.7 and adds Sections 98.74, 1102.61, and 1102.62 to the Labor Code.

Immigration: Worksite Enforcement Actions. AB 450, the “Immigrant Worker Protection Act,” prohibits employers from allowing immigration enforcement agents to have access to non-public areas of a workplace, absent a judicial warrant, and prohibits immigration enforcement agents to access, review, or obtain employee records without a subpoena or court order, subject to a specified exception. This bill requires an employer to provide notice of an immigration agency’s inspection of I-9 Employment Eligibility Verification forms or other employment records within 72 hours of receiving the federal notice of inspection—using a template created by the Labor Commissioner—to current employees; requires an employer to provide affected employees (i.e., those who may lack work authorization or whose documents have deficiencies) a copy of the inspection notice, upon reasonable request; and requires employers to provide affected current employees, and their authorized representative, a copy of the immigration agency inspection results and written notice of the obligations of the employer and the affected employee arising from the action. The bill grants exclusive authority to the Labor Commissioner or Attorney General to enforce these provisions and requires that any penalty recovered be deposited in the Labor Enforcement and Compliance Fund. Penalties for failure to satisfy these prohibitions and for failure to provide the required notices are: $2,000 up to $5,000 for a first violation, and $5,000 up to $10,000 for each further violation. The Labor Commission may recover up to a $10,000 penalty for each instance an employer re-verifies the employment eligibility of a current employee at a time or in a manner not required by federal law. Stay tuned for a detailed analysis of AB 450 coming soon. Adds Sections 7285.1, 7285.2, and 7285.3 to the Government Code; adds Sections 90.2 and 1019.2 to the Labor Code.

Harassment Training: Gender Identity, Gender Expression, and Sexual Orientation. SB 396 requires employers with 50 or more employees to add items to already mandated biennial supervisory training to prevent sexual harassment. The new content must include practical examples to address harassment based on gender identity, gender expression, and sexual orientation. Employers must also post a DFEH-developed poster regarding transgender rights. The bill also makes changes to the Unemployment Insurance Code. Amends Sections 12950 and 12950.1 of the Government Code.

VETOED

Gender Pay Gap Transparency Act. AB 1209 would (as of July 2019) have required employers with at least 500 California employees to collect information on differences in pay between male and female exempt employees and between male and female Board members. The bill would have required employers to submit the information to the California Secretary of State by July 1, 2020, in a form consistent with Labor Code § 1197.5, and to provide an update to the Secretary of State every two years. The bill would have required the Secretary to publish the information on a public website if the Legislature provided it with sufficient funding. Yesterday the Governor vetoed the bill, stating—as many employers’ groups had pointed out—that the bill’s ambiguous wording made it unclear that the bill would “provide data that will meaningfully contribute to efforts to close the gender wage gap. Indeed, I am worried that this ambiguity could be exploited to encourage more litigation than pay equity.” He also cited the trust he has placed in his Pay Equity Task Force to provide guidance and recommendations to “assist companies around the state with assessing their current wage practices.” For more detail on implications of this bill had it passed, click through to our in-depth analysis on AB 1209.

Reproductive Health. The Governor vetoed AB 569 on October 15, stating that the FEHA “has long banned such [reproductive health-based] adverse actions, except for religious institutions. I believe those types of claims should remain within the jurisdiction of the [DFEH].” The bill would have added a provision to the Labor Code prohibiting an employer from taking adverse employment action against an employee or the employee’s dependents or family members for their reproductive health decisions, including the use of any drug, device, or medical service (e.g., birth control, abortions, or in vitro fertilization). An employer that violates this prohibition would have been subject to penalties under Labor Code § 98.6, as well as reinstatement, reimbursement of lost wages and interest, and other appropriate compensation or equitable relief. This bill would have prohibited employers from attempting to contract out of these requirements, by making null and void any express or implied agreement waiving these requirements. The bill would have required employers to include a notice of these employee rights and remedies in their handbooks.

Employee Request: Injury and Illness Prevention Program. AB 978 would have required an employer to provide a free copy of the company’s injury prevention program to an employee, or their representative, within 10 days of receiving a written request. A representative would have included a recognized or certified collective bargaining agent, attorney, health and safety professional, nonprofit organization, or immediate family member. AB 978 would have allowed an employer to take reasonable steps to verify the identity or the person making the written request and authorized an employer to assert impossibility of performance as an affirmative defense against allegations of violations of these provisions. Governor Brown found this bill to be “unnecessary and duplicative” of current regulatory proposals sitting with the Cal-OSHA Standards Board and noted that their advisory committee would be “better suited to determine how to properly implement requirements of this kind.”

BILLS THAT FAILED TO MAKE THE LEGISLATIVE CUT

Opportunity to Work Act. The notorious AB 5 would have required employers with 10 or more employees in California to offer additional hours of work to existing nonexempt employees before the employer could hire additional or temporary employees. This bill piggy-backed on the San Jose voter-approved Opportunity to Work Ordinance that, effective March 2017, would have required employers to offer part-time employees additional hours before hiring new or temporary employees. Read more on what AB 5 would have implemented herehere, and watch here.

Rest Breaks. AB 817 would have created an exception to Labor Code section 226.7’s off-duty “rest period” requirement for employers providing emergency medical services to the public. The bill would have allowed EMS employers to require their employees to monitor and respond to emergency response calls during rest or recovery periods without penalty, so long as the rest period is rescheduled.

Retail Employees: Holiday Overtime. AB 1173 would have established an employee-selected overtime exemption that would have allowed a “retail industry” employee to work up to 10 hours per day with no overtime pay during the holiday season (November through January). Overtime paid at time and one-half of the employee’s regular pay rate would have applied to over 40 hours worked in a workweek or 10 in a work day; double time would have applied to work over 12 hours per day and over eight hours on the fifth, sixth, or seventh day in a workweek. The bill would have required employees to submit a written request for the flexible work schedule for approval by the employer. The authors of this bill did not specifically define what “retail industry” would have meant.

Overtime Compensation: Executive, Administrative, or Professional Employees. AB 1565 would have exempted an executive, administrative, or professional employee from overtime compensation if the employee earns a monthly salary of $3,956 or at least twice the state minimum wage for full-time employment, whichever is greater. This bill would have had California follow President Obama’s FLSA regulations increasing the yearly salary exempt threshold from $23,660 to $47,476 for executive, administrative, and professional workers. (Those regulations have been enjoined by a federal court.)

Health Professional Interns: Minimum Wage. AB 387 would have broadened the definition of employers required to pay minimum wage to include anyone who employs any person engaged in supervised work experience (i.e., students working clinical hours) to satisfy the requirements for licensure, registration, or certification as an allied health professional. This bill would have applied only to a work experiences longer than 100 hours and would not have applied to employers with fewer than 25 allied health professionals or a primary care clinic.

Resident Apartment Manager Wages. AB 543 would have extended an exemption from Industrial Welfare Commission orders allowing employers, who do not charge rent to a resident apartment manager pursuant to a voluntary agreement, to apply up to one-half of the apartment’s fair market value (no value cap) to meet minimum wage obligations to the apartment manager. This was up from the two-thirds previously provided but capped at $564.81 per month for singles, $835.49 for couples.

Voluntary Veterans’ Preference Employment Policy Act. Both AB 353 and its almost identical twin AB 1477 hoped to revise FEHA’s existing Vietnam-Era veterans’ status provision but failed to make it out of both houses and out of the house of origin, respectively. The bills would have expanded a private employer’s authority to institute and uniformly grant a hiring preference for veterans regardless of where the veteran served. The bills stated that the hiring preference would not have violated FEHA or any local or state equal opportunity employment law or regulation. But the bill would have prohibited the use of a veterans’ preference policy for the purpose of discrimination on the basis of any protected classification.

Credit and Debit Card Gratuities. AB 1099 would have required an entity—defined as “an organization that uses online-enabled applications or platforms to connect workers with customers … including, but not limited to, a transportation network company” (e.g., Uber)—to accept tips by credit or debit cards if the entity allows customers to pay with credit or debit cards. The bill would have required that the tip be paid to the worker the next regular payday following the date the customer authorized the card payment. This bill made it out of the Assembly but the author canceled its hearing in the Senate Committee on Labor and Industrial Relations so we may see this bill again next year.

Labor Organizations: Compulsory Fee Payments. AB 1174 would have established the “California Right to Work Act of 2017” to prohibit a requirement that employees pay into a labor union, charity, or other third party as a condition of employment or continuing employment. This bill would have made California part of the list of 28 other Right to Work states in the nation.

Employer Liability: Small Business and Microbusiness. AB 442 would have prohibited Cal OSHA from bringing any “nonserious violation” against small business or microbusiness employers without first notifying the employer of the violation and the right to cure within 30 days. This safe harbor would not have applied to any willful violation. The impact of this bill would have been far reaching—nearly 70% of California employers employ only a handful of employees.

Good Faith Defense: Employment Violations. SB 524 would have allowed an employer to raise an affirmative defense that, at the time of an alleged violation, the employer was acting in good faith when relying upon a valid published DLSE opinion letter or enforcement policy. This bill would not have applied to the DLSE’s prosecution of payment of unpaid wages.

PAGA: 2017’s Three Failed Efforts. 

AB 281 attempted to reform PAGA by (1) requiring an actual injury for an aggrieved employee to be awarded civil penalties, (2) excluding health and safety violations from the employer right to cure provisions, and (3) increasing employers’ cure period to 65 calendar days, up from 33.

AB 1429 would have limited the violations an aggrieved employee can bring, required the employee to follow specific procedures prior to filing suit, limited civil penalties recoverable to $10,000 per claimant and excluded the recovery of filing fees, and required the superior court to review any penalties sought as part of a settlement agreement.

AB 1430 would have required the Labor and Workforce Development Agency (“LWDA”) to investigate alleged Labor Code violations and issue a citation or determination regarding a reasonable basis for a claim within 120 calendar days; and allow an employee private action only after the LWDA’s reasonable basis notification or the expiration of the 120 day period. Read our further analysis of the proposed PAGA amendments here.

Workplace Solutions.

For more information on how these new Peculiarities might affect your company, read our in-depth focus blogs and contact your favorite Seyfarth attorney.

A thankful heart is not only the greatest virtue, but the parent of all the other virtues. ~Cicero

Dearest Reader,

We have much to be grateful for this year:

  • Generous, smart colleagues who contribute regularly to our blog—more than 50 posts so far in 2016!
  • The recent honor of being recognized as one of the Top 100 Legal Blogs in the country.
  • California legislators: the active group that keeps on giving us new and peculiar employment laws and amendments.

But our greatest gift—for which we are ever-thankful—is YOU, the loyal reader. Thank you for following our blogs, and for your thoughtful questions and contributions.

We’ve all noted the results of the November elections—both in California and nationally. Those results, together, seem likely to result in California employment law becoming even more “peculiar” than ever. While some will be more grateful than others for this trend, all should see it, we suggest, as validating our call to point out how California law differs from what folks face in America generally. Heck, there is even a Cal-exit secession initiative underway that, if it qualifies, will be on our ballot in 2018.

So the coming year should bring us no shortage of Cal-specific news to report, analyze, and deliver to you, on a more-or-less weekly basis.

Please continue to let us know how you think we’re doing. What would you like to read more of—or less of—in the coming year? How can we be more helpful to you? Our ears are open and we welcome your thoughts. You can contact an editor here.

Meanwhile, a very Happy Thanksgiving to you and yours.

As a loyal reader of our CalPecs Blog, you know that last year’s Senate Bill 1038 eliminated the Fair Employment and Housing Commission, including its administrative adjudication of FEHA claims. The bill created a Fair Employment and Housing Council, to perform the former Commission’s regulatory functions. 

Is the Council a new and improved “FEHC”?  Time will tell, but we got our first peek when we attended the Council’s very first meeting on Monday, June 18. 

Here’s a brief summary of the proceedings:

Swearing In:  The councilmembers Governor Brown appointed to serve until January 1, 2017 were sworn in:  Chair Chaya Mandelbaum, Dale Brodsky, Chanée Franklin Minor, Patricia Perez, and Andrew Schneiderman.

DFEH Updates: DFEH Director (and past CalPecs guest blogger) Phyllis Cheng made these observations:

  • Increased numbers of Complaints have been filed through the DFEH’s new online complaint filing system, and pursued by the DFEH;
  • Disability discrimination complaints are currently the most common, followed by retaliation, race, gender discrimination, and sexual harassment (precise statistics on this and the above to be posted on www.dfeh.ca.gov);
  • Some pending legislation that would amend the FEHA in various respects:

◊   AB 556 — addressing discrimination toward veterans and members of the armed services;

◊   SB 292 — to clarify that sexual harassment does not require proof of sexual desire under FEHA;

◊   SB 404 — to add “familial status” as a protected characteristic; and

◊   SB 655 — to modify the California Supreme Court’s decision in Harris v. City of Santa Monica, by defining what a “substantial factor” is in a “mixed-motive” defense action, and providing a statutory penalty of $25,000 if a plaintiff proves that a protected characteristic was a substantial factor in the adverse employment action. 

More on these bills and others in upcoming Legislative Update blogs.

Substantive Regulatory Changes to Come? 

  • The Council has formed subcommittees to craft proposals for substantive changes to the FEHA implementing regulations in the areas of the California Family Rights Act (the CA analog to the FMLA) and hate crimes, in addition to other broad housing and employment topics. 
  • Each councilmember volunteered to serve on at least two subcommittees, and all members will evaluate any proposed changes.  Any proposed changes to the Regulations that are substantive in nature will follow the formal rulemaking process.

We’ll continue to follow the new FEHC’s activities to keep you informed of developments. 

Special thanks to Seyfarth Summer Diversity Fellow Dia Kirby for her assistance with this blog entry.

Isn’t it true that nationwide employers can interview and hire employees for their California offices so long as they follow federal hiring laws?  In a nutshell, no way.  Hiring in California presents a host of nuanced, state-specific rules that often add up to “don’ts.” We list a few for you below.

Don’t Oversell

Question:  We really would like to hire this guy.  Is it okay to tell him what he wants to hear about the job?

Answer:  No, especially if he will be moving for the job.  California Labor Code § 970 prohibits employers from making knowingly false representations about the nature of the work, the length of time that the work will last, and the compensation, among other things.  Not only can an alleged misrepresentation serve as the basis for a civil lawsuit, it is also a misdemeanor punishable by a fine or imprisonment for up to 6 months, or both!

Don’t Forget to Exclude The “Puffer”

Question:  We can ask an applicant about criminal convictions, right?

Answer:  Yes, but make sure you do not ask questions about any arrests, detentions that did not result in conviction, or certain marijuana convictions that are over two years old.  If the marijuana inquiry prohibition is violated, an applicant can recover the greater of his or her actual damages or $200, plus attorneys’ fees and costs.  It is also a misdemeanor, punishable by a fine.

Don’t “Judge”

Question:  An applicant owns handguns and goes to the shooting range on weekends to practice.  These are valid reasons not hire him, right?

Answer:  No, if the conduct is lawful, and takes place off-premises and during nonworking hours.  Labor Code §§ 96(k) and 98.6 (c)(1) protect applicants from such discrimination.  If such discrimination occurs, the applicant will be entitled to employment, and reimbursement for lost wages and benefits caused by the acts of the prospective employer.

Don’t Take Solace in Your Arbitration Agreements

Question:  Our company requires new hires in all states where we do business, including those in California, to sign an arbitration agreement.  We won’t have to worry about lawsuits in California court, correct?

Answer:  Not necessarily.  The California Supreme Court held in Armendariz v. Foundation Psychcare Services that “unconscionable” arbitration agreements are unenforceable.  Unconscionability is defined very broadly and includes situations where an employee does not have a realistic opportunity to bargain about the terms of an arbitration agreement, or where the terms are harsh or one-sided.  Some thought the United States Supreme Court’s decision in AT&T Mobility LLC v. Concepcion would chip away at Armendariz in favor of enforcement of arbitration agreements, but most California courts have refused to part with the Armendariz holding. (See e.g., Compton v. Superior Court).

Don’t Forget The “Paper”

Question:  We follow federal law in the distributions to new employees at or near the time of hire.  We are good to go in California, right?

Answer:  No.  California has specific distribution requirements at or near the time of hire, including:

  • California Labor Code § 2810.5 requires private California employers to provide written notice to employees no later than their first day at work about information including, but not limited to, the rate of pay, basis of pay (e.g., hourly, salary, commission, etc.), allowances for items claimed as part of the minimum wage (e.g., tips, meals and lodging), the regular payday, employer’s name, address, and phone number, any “dba,” and information regarding the employer’s worker’s compensation insurance carrier. 
  • Employers must submit a Report of New Employee(s) (DE 34) within 20 days of any new employee’s first day of work.  Employers must also provide new employees with, among other things, a Disability Insurance Provisions pamphlet (DE 2515) within five days of hire, a Paid Family Leave Insurance pamphlet (DE 2511) no later than any new employee’s first day of work, and a California tax withholding form (DE-4), which some employees must complete upon hire. 
  • The California Department of Fair Employment and Housing requires employers to provide its Sexual Harassment pamphlet (DFEH 185) or an equivalent document to all new hires.

Workplace Solutions: Even if you have only a handful of employees in California, it is prudent to familiarize yourself with the California-specific requirements pertaining to hiring and new employees.  A review of  any employment applications, interview questions, and new hire packets or checklists are all steps to ensure California compliance.

It’s here!  On April 30, we released the 2013 edition of Cal-Peculiarities: How California Employment Law is Different, the industry’s only annual guide that focuses exclusively on the most vexing aspects of employment law in the country’s most populous state.   Authored by Seyfarth’s California Workplace Solutions group, this 262-page guide captures the latest legislative, judicial and regulatory developments which continue to make California the most uniquely challenging environment for private employers in the United States.

Led by Seyfarth co-editors in chief, David Kadue and Colleen Regan, Cal-Peculiarities marks its 14th year in publication and is available for the first time in e-book format, which can be ordered here. 

We also hope you caught our Cal Peculiarities Webinar presented on April 30 by our own David Kadue, Laura Maechtlen and Andrew McNaught.  If you missed it, you can access a recording here.

Highlights of the broadcast include: 

  • New requirements for businesses on posting information regarding human trafficking 
  • Prohibition for employers requesting or requiring employees or job applicants to disclose or divulge information regarding personal social media accounts, including passwords 
  • Inclusion of breastfeeding as a protected characteristic under the Fair Employment and Housing Act 
  • Reorganization of the Department of Fair Employment and Housing 
  • Continued striking down of arbitration agreements, notwithstanding the U.S. Supreme Court upholding the preemptive power of the Federal Arbitration Act 
  • Inability of prevailing defendants to obtain attorney fees relating to s claims for meal- and rest-break violations, or for split-shift premium pay 
  • Court holding that a retailer did not have to provide “suitable seats” to a cashier, but suggested that a lean-stool might be required 
  • Application of the ban on non-compete agreements to settlement agreements 
  • Continued support from courts upholding special provisions favoring union picketing 
  • Court decision that a group of individuals could use a class action to challenge their classification as independent contractors

You won’t want to have missed it.

Coming soon:  Stay tuned for the next in our series on Hiring Issues. 

As you may know, Seyfarth Shaw is the only firm to publish a book annually that highlights the inevitable changes in California law.  We want our blog readers to be the first to hear of the release of the 2013 edition! 

California continues to be “where the future happens” for employment law.  If your company does business in California, you are aware that it is more important than ever that California employers understand their peculiar legal obligations.  We are thrilled to announce that we are very close to the release of 2013 Cal-Peculiarities: How California Employment Law is Different.  This publication, authored by our California Workplace Solutions group, reflects the breadth and depth of our California employment practice, and focuses entirely on the most vexing aspects of California employment law.  More importantly, this publication will be available to our clients and friends beginning Monday, April 29th!  Please stay-tuned for additional information.

We also invite you to our webinar, The Peculiarities of California Employment Law Annual Update, taking place on Tuesday, April 30th.  In this program, our experts will cover the growing list of laws that should concern executives, managers, general counsel, and human resource professionals in California.  We promise you won’t want to miss this event!  If you would like to sign up for this program, please click here to register.

Wouldn’t we like to know if a potential applicant has ever criticized a former employer, or whether their online presence gives evidence of illegal activity or violent, discriminatory or unethical behavior? Or just poor judgment? What if they belong to political groups, like the Tea Party or the ACLU?

What is so wrong with learning information like that? The answer is it can expose the employer to liability.

The use of social media in hiring decisions remains a hotbed of potential legal risk for employers. Yet, an increasing number of employers are using social media sites such as Facebook, LinkedIn, Twitter, YouTube and even Craigslist to screen potential candidates to avoid hiring the “wrong” candidate.

What Can An Employer Look At?  California enacted AB 1844 last year, which affords job applicants greater social media protections by prohibiting employers from seeking log-in information from applicants, asking applicants to “friend” other employees, or asking an applicant’s “friends” to disclose what the applicant has posted on social media.  However, employers are not explicitly restricted from accessing publicly available information about candidates.

  • Bandwagon effect:  Since California passed AB 1844, many other states have followed with similar legislation. On the federal front, the National Labor Relations Board (NLRB) has kept a watchful eye on employers using social media information in employment decisions.  It is worried that concerted activity protected under federal labor laws may be restricted.  On February 4, 2013, the federal government reintroduced the Social Networking Online Protection Act” (SNOPA) which would prevent employers from seeking access to social media and other online information from job seekers and current employees.

­Discrimination Traps.  Social media can reveal personal information about a candidate that would be illegal to request during the hiring process (e.g., physical disability, age, marital status, religious affiliation, political affiliations, etc.).  Employers should be mindful that this may open the door for potential discrimination claims.

  • Example:  An applicant, a mother who tweets that her son is undergoing cancer treatments, is not hired.  She could bring a claim for association discrimination under the Americans with Disabilities Act (ADA), the California Fair Employment & Housing Act (FEHA), or even the Genetic Information Nondiscrimination Act (GINA).
  • Example: A decision not to hire an individual because he or she has sued a previous employer could violate laws prohibiting retaliation under antidiscrimination, wage and hour, or whistleblower statutes.
  • Example: The CA Department of Industrial Relations has interpreted Section 96(k), which prohibits employers from taking adverse action due to an employee’s lawful conduct outside of work, to apply to decisions not to hire employees, even though the statute does not explicitly reference hiring. 

Workplace Solutions:  The best practice is to avoid using social media in hiring decisions since there are serious legal risks involved.  If an employer would still “Like” to do this, the following steps can help you mitigate those risks:

  • Document the hiring process.  Include a checklist of the relevant hiring credentials that sets forth the scope of any lawful use of social media information (e.g., if a candidate’s social media background is relevant to the position being filled).
  • Wait Until You Extend the Offer.  If you make an offer and then later discover that a new hire has made a material misrepresentation about prior employment, etc., you can then record the offense.
  • Designate a Screener.  Have a non-decision-maker do the search and only have them report on permissible job-related information.  Filter out the rest.
  • Educate Your Employees.  Instruct HR and management employees to not conduct independent searches on prospective candidates.  Train and educate personnel on how information from or even accessing an individual’s profile on social media and the Internet may give rise to allegations of employment discrimination.
  • Be consistent:  If you are going to use social media in hiring, use it for all applicants, not just some. 
  • Be skeptical.  Remember, not everything on the Internet is true!

Picture this scenario:  you run a private residential facility for abused children.  Late one night, one of your computers is used to access pornographic web-sites and other inappropriate material in violation of several well-publicized workplace policies.  After further investigation, you learn that the inappropriate computer usage occurred on several occasions, but was limited to that one computer, which is located in an office shared by two day-shift employees in the administrative building.  Several employees have access to the building and could have used the computer on the nights in question.  Concerned that the culprit might be a staff member who works with the children, you hatch the perfect plan to catch him or her:  place a hidden camera in the office!  Of course, you don’t want to publicize its placement.  That would defeat the purpose and the guilty party would simply find another computer to use.  Besides, you plan to activate the camera only at night, several hours after the day shift has left the facility.  The daytime occupants of the office won’t care that it’s there.  Genius!

Did we mention that you are operating this facility in California?

The above scenario mirrors the facts of a case brought by, you guessed it, the two day shift employees who brought suit alleging that the placement of the hidden camera in their office without their knowledge or consent violated their right to privacy under both common law and the California Constitution.  What?  Are you telling me that merely placing a camera in an office, without even recording the occupants during business hours, is unlawful?  Fortunately, the California Supreme Court answered that question with a resounding “no” in Hernandez v. Hillsides, Inc., 47 Cal. 4th 272 (2009).  However, the case makes clear that whether or not you can surreptitiously videotape depends on the facts and circumstances unique to your workplace, and you must carefully evaluate when, where, why and how you can do so in order to minimize your liability.

For starters, in California, employees have a constitutional right to privacy which creates at least a limited right of action against both private and government entities, which is in addition to other tort actions, like unlawful intrusion.  California has a well-developed body of law prescribing the various elements that a plaintiff must prove in order to succeed on an invasion of privacy claim; however, when considering secretly videotaping your employees, these are the big questions you have to ask:

Do employees have a reasonable expectation of privacy in the area that is going to be recorded?  Bathrooms, locker rooms or other areas where reasonable persons would agree employees rightfully expect privacy are strictly off-limits.  However, hallways or entryways where employees interact with the public and one another and expect that their activities can and will be viewed by others are generally areas where a reasonable person would not have an expectation of privacy. 

Do you have a good faith legitimate business reason for secretly videotaping?  Harassment, blackmail or prurient curiosity are never valid reasons for secretly recording your employees’ actions.  On the other hand, the court found the reason articulated by Hillside in our case above, which was to prevent a rogue employee with access to children in a residential facility from accessing pornographic material at the facility, was a legitimate reason that did not offend societal standards.

Is the taping conducted in a reasonable manner, or is it offensive?  Even if secret videotaping is conducted for legitimate business reasons in areas where employees have no reasonable expectation of privacy, the manner in which the recording is conducted could still subject an employer to a breach of privacy claim.  For example, if a camera is zoomed in on a female employee’s cleavage while she’s conversing with a customer, or an employees’ back-side as he/she walks down the hallway, what otherwise would have been acceptable becomes arguably offensive and unacceptable.

Workplace Solutions: In the end, whether, when, why, and how to surreptitiously videotape your California employees should be decided on a case by case basis after full review of the factual circumstances.  Most videotaping does not need to be secret and disclosing your intention to do so may prevent employees from engaging in behavior that violates your policies. 

If you determine videotaping is appropriate, determine whether the purpose of filming can be accomplished with the employees’ knowledge or whether secret taping is required.  If notice is appropriate, consent to the taping is recommended, but notice will typically suffice, especially where the cameras are prominently displayed and in common areas.  Placement of signs, such as “smile, you’re on camera,” in areas where videotaping is taking place is a common way to provide notice of taping.