News & Analysis

Pizza to go — hold the harassment

The California Supreme Court recently issued a key decision on whether a franchiser can be held vicariously liable for sexual harassment committed by a franchisee's employee. The answer depends on whether the franchiser retained or assumed the right of general control over daily operations at its franchised location.

New California employment laws in 2015

Governor Jerry Brown recently signed several employment bills into law. Unless otherwise noted, those laws will become effective January 1, 2015. What follows is a brief summary of some of the new laws you should be aware of and some strategies to make sure your practices and policies are up to date.

Wage and hour law 

AB 2074: double the trouble. Existing law allows an employee to recover liquidated damages equal to the amount of unpaid wages, plus interest, in a court action in which the employee alleges he was paid less than the state minimum wage. Assembly Bill (AB) 2074 provides that a civil or labor commissioner-related action for liquidated damages may be filed at any time before the expiration of the statute of limitations for filing the underlying action.

AB No. 2743: no contracting away waiting time penalties. An employer can be liable for waiting time penalties for the willful failure to pay wages within the statutory or contractually agreed on time frame after an employee is discharged or quits. Labor Code Section 209.1 authorizes entertainment industry employees and employers to enter into a collective bargaining agreement (CBA) that specifies the time limit for payment of wages after an employee is discharged or laid off. AB 2743 provides that an employer will be liable for waiting time penalties if it willfully fails to pay the wages due in accordance with the terms of a CBA under Section 209.1.

SB 1360: counting recovery periods as hours worked. Senate Bill (SB) 435, which was enacted in 2013, provides that an employee is entitled to a recovery period when he is working outdoors in temperatures exceeding 85° Fahrenheit. Employers must provide and encourage employees to take a cooldown rest period of no less than five minutes when employees feel the need to do so for protection from overheating. The California Division of Occupational Safety and Health (Cal/OSHA) regulates these recovery periods.

When recovery periods were initially introduced, employers raised several questions, such as whether recovery periods would be duty-free, whether they would be paid or unpaid, and how they would be implemented. SB 1360 provides that similar to rest breaks, recovery periods are to count as hours worked for which there will be no deduction from wages. This creates several interesting issues:

  1. Employers that pay employees a piece rate must keep track of all time workers spend taking a recovery period and compensate them separately for recovery breaks. That also means that wages earned for productive tasks cannot be used to subsidize paid recovery breaks.
  2. An employer risks not only civil liability but also a citation from Cal/OSHA for a heat illness violation if it fails to pay employees for recovery periods.
  3. Because there is no legal cap on how many recovery periods workers can take in a day, employers will have to carefully review their heat illness policies to put a cap on how many recovery periods are reasonable under the provision.

Discrimination and retaliation

AB No. 2751: tying up loose ends from AB 263. Last year, AB 263 created California Labor Code Section 1019, making it unlawful for an employer or any other person to engage in, or direct another person to engage in, any "unfair immigration-related practice" against a worker in retaliation for exercising a legal right. Unfair immigration-related practices include requesting more or different documents than are required under law, threatening to file a false police report, using the federal E-Verify system to check the status of an employee in a time and manner not required by law, or threatening to contact immigration authorities. AB 2751 expands the definition of "unfair immigration- related practices" in Labor Code Section 1019 to include threatening to file or filing a false report or complaint with any state or federal agency.

The new law authorizes a civil action for equitable relief and damages or penalties for any employee who is subject to an unfair immigration- related practice. AB 2751 also authorizes a court to issue an order directing the appropriate government agency to suspend an employer's business licenses.

AB 263 further provided that employers are prohibited under Labor Code Section 1024.6 from discharging or discriminating, retaliating, or taking any adverse action against an employee because the employee updates his "personal information." AB 2751 clarifies that updating personal information means a lawful change of name, Social Security number, or federal employment authorization document.

Finally, AB 263 amended Labor Code Section 98.6 to make it illegal to discharge or discriminate, retaliate, or take any adverse action against an employee for making a written or oral complaint for unpaid wages. It also provided that an employer that violates Section 98.6 is liable for a civil penalty of no more than $10,000 per employee for each violation. AB 2751 clarifies that the $10,000 penalty shall be awarded to the employees who suffered the violation.

Health and safety

AB 326: getting communications method up to date. Under the old Labor Code Section 6409.1, employers were required to file a complete report of every occupational injury or illness suffered by an employee. The section required an employer to make an immediate report by telephone or telegraph of every case involving an employee's serious injury, illness, or death. Cal/OSHA may assess a civil penalty of not less than $5,000 for each violation.

AB 326 provides that an employer may make an immediate injury or illness report by telephone or e-mail, which is a much easier way to notify the division. Employers must remember to retain e-mails for their records as a precautionary measure in case there is a dispute about whether Cal/OSHA was notified.

Public-sector employment

SB 1240: We cannot rehire you, so stop applying. The California Civil Service Act requires that the employment procedures of the California Department of Human Resources and each state agency conform to federal and state laws governing employment practices, including the use of employment forms. The Act establishes requirements for the development, use, collection, and review of employment and occupational licensing and registration forms. Any violation of the Act constitutes an unlawful employment practice subject to the enforcement provisions of the California Fair Employment and Housing Act (FEHA) and the Civil Service Act.

SB 1240 requires that employment forms specifically ask applicants to disclose whether they have entered into a previous employment agreement with the state and whether the agreement specifically prohibits them from seeking or accepting any subsequent employment with the state.

Bottom line

The laws covered in this article are in no way an exhaustive list of the significant changes that constantly occur in California employment law. Take time to review the new employment laws and consult with your attorney to make sure you understand your legal obligations.

The author can be reached at Epstein, Becker & Green, P.C., in San Francisco,

NLRB continues its attack on standard employer policies

The National Labor Relations Board (NLRB) has taken an extremely aggressive position over the last several years that standard employee handbook provisions such as at-will-employment, employee courtesy, social media, and confidentiality policies constitute unfair labor practices (ULPs) under the National Labor Relations Act (NLRA) because they dissuade employees from exercising their rights to engage in concerted activities. Significantly, even employers whose workers are not represented by unions can be held liable for ULPs based on their employment policies.

Whistleblower receives protection for reporting known information

In most whistleblower cases, the employer assumes that the employee's disclosure or report that triggered the alleged retaliation is new information. However, in a recent case, the court of appeal affirmed its prior ruling that a public employee may have a viable whistleblower claim even though the employer was well aware of the information in his report. (See "Reporting old news: Tardy whistleblowers still may get protection" on pg. 4 of our April 28, 2014, issue.)

9th Circuit nixes ADA claim of cop who didn't get along with others

In some circumstances, a medical or psychological condition may interfere with a person's ability to relate to others. Conceivably, such a condition could be subject to protection from discrimination under the Americans with Disabilities Act (ADA). But sometimes a jerk is just a jerk. On that basis, the 9th Circuit recently reversed an ADA trial verdict in favor of a police officer who had claimed his abusive communications with coworkers were due to his attention deficit hyperactivity disorder (ADHD).

Even small adverse actions may be unlawful retaliation

When a worker engages in some form of protected activity, what actions by her employer may be deemed unlawful retaliation? That was the question addressed recently by the 9th Circuit in a First Amendment retaliation claim filed by a public-sector employee in California.

Sacramento passes Healthy Workplaces, Healthy Families Act

The Healthy Workplaces, Healthy Families Act of 2014 passed the California Legislature on August 30. Governor Jerry Brown issued the following statement supporting its passage: "Tonight, the legislature took historic action to help hardworking Californians. This bill guarantees that millions of workers . . . won't lose their jobs or pay because they get sick." Under the law, an employee would be entitled to use accrued paid sick days beginning the 90th day of employment.

The new economy

Many of my clients are looking for ways to redefine the working relationship away from the employee model. There are various motives for this: the desire to avoid employee liability, the hope to avoid paying taxes and benefits, and the goal to avoid "head count" (whatever that means). But the law (and government regulators) presumes that your worker is an employee unless you can prove otherwise.

California editors to play key role in national employment law event

California Employment Law Letter editor Mark I. Schickman and assistant editor Cathleen S. Yonahara will have important roles in the 19th annual Advanced Employment Issues Symposium (AEIS) set for Las Vegas (November 5-7).

Workplace Trends

Cell phones, gossip found among top time wasters. A study from CareerBuilder shows the personal use of technology is one of the leading culprits behind unproductive activity at work. Twenty-four percent of respondents to a survey admitted they will spend at least one hour during a typical workday on personal calls, e-mails, or texts. Twenty-one percent estimated they spend one hour or more a day searching the Internet for nonwork-related information. Employers were asked what they see as the primary productivity stoppers. They pointed to cell phones and texting, gossip, the Internet, social media, snack or smoke breaks, noisy coworkers, meetings, e-mail, coworkers dropping by, and coworkers putting calls on speaker phone. Employers also named some unusual things they've seen employees doing when they should have been working. Examples include an employee taking selfies in the bathroom, an employee blowing bubbles in sub-zero weather to see if they would freeze and break; and an employee caring for her pet bird that she smuggled into work.