California Supreme Court Delays Decision In Long Awaited Brinker Meal Period Case

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, on July 22, 2008, in Brinker v. Superior Court, the California Court of Appeal held that while an employer is required to "provide" to non-exempt employees at least one unpaid, duty-free meal period of at least 30 minutes each workday of more than 6 hours, the obligation to "provide" required meal  periods means to make the required meal periods available and not to ensure that employees take all required meal periods.  This was good news for employers and especially good news to numerous employers defending against claims of alleged meal period violations.  

The good news was short lived, however.  Just two months later, on October 22, 2008, the California Supreme Court granted the plaintiff's petition for review of the Court of Appeal's decision in Brinker.  As a consequence, employers defending lawsuits alleging violation of meal period requirements could no longer cite Brinker as authority that an employer is not required to ensure that employees take all required meal periods made available to them, and plaintiffs could once again contend an employer has a duty to ensure all required meal periods are taken and to document that all required meal periods are taken.

After the California Supreme Court granted review of Brinker, the Court of Appeal issued seven additional decisions holding an employer is required to make required meal periods available but is not required to ensure that employees take all required meal periods made available to them.  See Brinkley v. Public Storage, Faulkinbury v. Boyd & Associates, Brookler v. Radio Shack Corp., Hermandez v. Chipotle Mexican Grill, Tien v. Tenet Healthcare, Lamps Plus Overtime Cases, and Santos v. Vitas Healthcare.  However, the California Supreme Court promptly granted review of each of those seven decisions, too, and, like Brinker, those seven decisions can no longer be cited as authority that an employer is not required to ensure that employees take all required meal periods made available to them.  

This state of affairs left employers, employees, and courts tasked with resolving disputes over whether an employer has or has not complied with its obligations to "provide" required meal periods in the dark about what the law requires and has complicated the handling of the innumerable class action wage and hour lawsuits brought against California employers. 

On November 8, 2011, over three years after granting review, the California Supreme Court conducted the long awaited oral argument.  

In an unusual turn of events, on December 2, 2011, the court granted the request of the California Employment Law Council to submit an additional post-hearing amicus curiae or "friend of the court" brief addressing the issue of "rolling" meal breaks, which was raised during the November 8, 2011 oral argument.  The issue concerns when during the workday employers must "provide" the first meal period and whether, and if so, when during the workday employers must "provide" a second meal period.  It has been widely believed that an employer is required to "provide" a second meal period only when a non-exempt employee works more than 10 hours in a workday and only after the tenth hour of work.  However, on account of language in the Industrial Welfare Commission Wage Orders stating "[n]o employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes," the court is now considering whether an employee who takes a meal period relatively early in his or her workday is entitled to a second meal period if an employee works 5 hours after taking an "early" meal period, even if the employee's workday does not exceed 10 hours.

On December 14, 2011, the California Supreme Court issued an order permitting the parties to the case to file no later than January 13, 2012, answers to the  additional post-hearing amicus curiae brief submitted by the California Employment Law Council and permitting replies to any such answers to be filed no later than January 13, 2012.  In that same order, the California Supreme Court vacating "submission of the cause" and stating the case will be deemed resubmitted on January 13, 2012.  By that order, the court effectively extended the 90 day deadline for the court to issue its decision in the case from February 6, 2011 (i.e., 90 days after the close of the November 8, 2011 oral argument) to April 11, 2012.  

We are continuing to monitor this important case, and will report on further developments as information becomes available.

National Labor Relations Board Postpones Required Notice Posting Date to April 30, 2012 at Request of Court

By Jonathan Judge and Thomas A. Lenz

As previously reported here, in late August, the National Labor Relations Board confirmed the approval of a final rule which requires all employers under NLRB jurisdiction to post a Notice which will inform employees of their rights under the National Labor Relations Act. Today, the NLRB agreed to postpone the date employers will be required to post this notice from January 31, 2012 to April 30, 2012. The postponement came at the request of a federal court in Washington D.C. that is hearing legal challenges to the rule. The NLRB stated that the postponement should facilitate the resolution of such legal challenges that have been filed with respect to the rule.

The poster, which can be viewed here, notifies employees of their rights under the NLRA, which include:

• The right to form and join unions;
• The right to engage in concerted activities concerning employees' wages, hours, and working conditions;
• The right to make requests for changes in wages, hours, and working conditions,
• The right to strike and withhold services because of a dispute on wages, hours, and working conditions;
• The right to make complaints or urge other employees to action on wages, hours, and working conditions (through workplace conversation or social media posts, for example); and
• The right to refrain from such activities.

The NLRB's announcement buys more time for private sector employers to seek guidance on how this new rule will impact their business and communications with employees.

California Supreme Court Accepts Post Hearing Additional Briefing In Pending Brinker Meal Period Case: Will The Court Require "Rolling" Meal Periods?

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, on July 22, 2008, in Brinker v. Superior Court, the California Court of Appeal held that while an employer is required to "provide" to non-exempt employees at least one unpaid, duty-free meal period of at least 30 minutes each workday of more than 6 hours, the obligation to "provide" required meal  periods means to make the required meal periods available and not to ensure that employees take all required meal periods.  This was good news for employers and especially good news to numerous employers defending against claims of alleged meal period violations.  

The good news was short lived, however.  Just two months later, on October 22, 2008, the California Supreme Court granted the plaintiff's petition for review of the Court of Appeal's decision in Brinker.  As a consequence, employers defending lawsuits alleging violation of meal period requirements could no longer cite Brinker as authority that an employer is not required to ensure that employees take all required meal periods made available to them, and plaintiffs could once again contend an employer has a duty to ensure all required meal periods are taken and to document that all required meal periods are taken.

After the California Supreme Court granted review of Brinker, the Court of Appeal issued seven additional decisions holding an employer is required to make required meal periods available but is not required to ensure that employees take all required meal periods made available to them.  See Brinkley v. Public Storage, Faulkinbury v. Boyd & Associates, Brookler v. Radio Shack Corp., Hermandez v. Chipotle Mexican Grill, Tien v. Tenet Healthcare, Lamps Plus Overtime Cases, and Santos v. Vitas Healthcare.  However, the California Supreme Court promptly granted review of each of those seven decisions, too, and, like Brinker, those seven decisions can no longer be cited as authority that an employer is not required to ensure that employees take all required meal periods made available to them.  

This state of affairs left employers, employees, and courts tasked with resolving disputes over whether an employer has or has not complied with its obligations to "provide" required meal periods in the dark about what the law requires and has complicated the handling of the innumerable class action wage and hour lawsuits brought against California employers. 

On November 8, 2011, over three years after granting review, the California Supreme Court conducted the long awaited oral argument.  

In an unusual turn of events, on December 2, 2011, the court granted the request of the California Employment Law Council to submit an additional post-hearing amicus curiae or "friend of the court" brief addressing the issue of "rolling" meal breaks, which was raised during the November 8, 2011 oral argument.  The issue concerns when during the workday employers must "provide" the first meal period and whether, and if so, when during the workday employers must "provide" a second meal period.  It has been widely believed that an employer is required to "provide" a second meal period only when a non-exempt employee works more than 10 hours in a workday and only after the tenth hour of work.  However, on account of language in the Industrial Welfare Commission Wage Orders stating "[n]o employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes," the court is now considering whether an employee who takes a meal period relatively early in his or her workday is entitled to a second meal period if an employee works 5 hours after taking an "early" meal period, even if the employee's workday does not exceed 10 hours. 

Suffice it to say it would be a stunning development if the court holds employers are required to "provide" such "rolling" meal periods.  Such a holding would potentially expose California employers to truly unanticipated potential liability for penalties for failing to "provide" a second meal period even when an employee does not work more than 10 hours in a workday and would further compromise employers' ability to provide employees flexibility as to when meal periods take place.

We are continuing to monitor this case, and will report on further developments as information becomes available. 

Court of Appeal Affirms Sexual Harassment Verdict And Award Of Attorney's Fees And Costs

By Christopher S. Andre and Scott K. Dauscher

In a partially published and partially unpublished decision in Fuentes v. AutoZone, Inc., the California Court of Appeal affirmed a judgment for alleged sexual harassment damages of $160,000.00 against the two alleged harassers and against the employer and affirmed the trial court's award of $677,025.00 in attorney's fees and $23,898.76 for a total award of $860,923.76.  The Court of Appeal rejected AutoZone's argument that the verdict was not supported by substantial evidence and rejected AutoZone's argument that the attorney's fees award was inflated.  

Although the decision breaks little new ground, it does offer a number of takeaways for California employers:

•  The jury found each of the two alleged harassers to be 50% responsible for Fuentes' alleged damages of $160,000, but since an employer is under California law strictly liable for sexual harassment by supervisors, the entire judgment was awarded against AutoZone.

• Although the allegedly harassing conduct occurred over a relatively compressed period of time (approximately three weeks), the Court of Appeal held there was substantial evidence that the alleged harassment was both pervasive and severe, which are required showings when the plaintiff's theory of liability is a hostile work environment based on alleged sexual harassment.  

• Appellate courts are reluctant to overturn jury findings of fact, and appellate courts generally will not reweigh the evidence or credibility determinations made by a jury. 

• "Reasonable" attorney's fees (here $677,025.00) can greatly exceed the amount of damages awarded to an alleged victim of sexual harassment.

California Court of Appeal Holds One Time Contract For Removal And Trimming Of Trees For State Agency Requires Payment Of Prevailing Wages

By Christopher S. Andre and Scott K. Dauscher

California's Prevailing Wage Law (Labor Code sections 1720-1861) generally requires that persons employed on Public Works be paid "not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed" as determined by the Director of the Department of Industrial Relations.  "Public works" is broadly defined to include "[c]onstruction, alternation, demolition, installation, or repair work done under contract and paid for in whole or in part of of public funds."  The term "prevailing wages" is not synonymous with average or market wage rates for a particular kind of work in a given local.  "Prevailing wages" are typically union scale wages regardless of whether such wages are typically paid in a given market on non public works projects.  For example, the general prevailing wage for a tree trimmer who works above ground is currently $27.49 per hour.  Prevailing wage determinations for various trades can be viewed here. 

According to a decision of the California Supreme Court, California's Prevailing Wage Law is intended "to protect employees from substandard wages that might be paid if contractors could recruit labor from distant cheap-labor areas; to permit union contractors to compete with nonunion contractors; to benefit the public through the superior efficiency of well-paid employees; and to compensate nonpublic employees with higher wages for the absence of job security and employment benefits enjoyed by public employees."  See Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 987.  State agencies are not required to pay "prevailing wages" to state employees. 

Significant consequences can be imposed against a contractor that fails to pay prevailing wages when payment of prevailing wages is required.  Such consequences include in addition to payment of the required prevailing wages that were not paid, civil penalties, suspension from bidding on or working on public works projects for up to three years, and criminal prosecution for failing to maintain required payroll records. 

In Reliable Tree Experts v. Christin Baker, Reliable Tree Experts sought a writ of administrative mandamus challenging the determination of the Director of the Department of Industrial Relations that Reliable Tree Expert's contract with the California Department of Transportation (Caltrans) calling for Reliable Tree Experts to prune certain trees and to remove certain diseased trees along state highways in a designated area required the payment of prevailing wages.    

The trial court and the Court of Appeal both disagreed with Reliable Tree Experts' contention the work called for by its contract with Caltrans did not qualify as a "public work" because landscape maintenance work, such as pruning trees and removing trees, is not "[c]onstruction, alternation, demolition, installation, or repair work."  The Court of Appeal held that maintenance work is a type of work that is subject to prevailing wages because, among things, the Prevailing Wage Law codified in part at Labor Code section 1771 states it is "applicable to contracts let for maintenance work," and because the term "maintenance" as defined by applicable regulation set out at Public Contract Code section 21002 expressly includes landscape maintenance.  The Court of Appeal rejected also Reliable Tree Experts' contention that the work called for by its contract was not "maintenance" on the theory that its one time contract with Caltrans did not qualify as maintenance because the project was not a "routine, recurring and usual activity" for Reliable Tree Experts as to its project with Caltrans.  The court agreed with the position of Caltrans and the Director of the Department of Industrial Relations that '[w]hen determining whether work is 'routine, recurring and usual,' the . . . focus must be on the work in terms of the property being worked, not the terms of an individual contract."

November 8, 2011 Oral Argument In Brinker To Be Broadcast Live

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, on July 22, 2008, in Brinker v. Superior Court, the Court of Appeal held that while an employer is required to "provide" to non-exempt employees at least one unpaid, duty-free meal period of at least 30 minutes each workday of more than 6 hours, the obligation to "provide" required meal  periods means to make the required meal periods available and not to ensure that employees take all required meal periods.  This was good news for employers and especially good news to numerous employers defending against claims of alleged meal period violations. 

The good news was short lived, however.  Just two months later, on October 22, 2008, the California Supreme Court granted the plaintiff's petition for review of the Court of Appeal's decision in Brinker.  As a consequence, employers defending lawsuits alleging violation of meal period requirements could no longer cite Brinker as authority that an employer is not required to ensure that employees take all required meal periods made available to them, and plaintiffs could once again contend an employer has a duty to ensure all required meal periods are taken and to document that all required meal periods are taken.

After the California Supreme Court granted review of Brinker, the Court of Appeal issued seven additional decisions holding an employer is required to make required meal periods available but is not required to ensure that employees take all required meal periods made available to them.  See Brinkley v. Public Storage, Faulkinbury v. Boyd & Associates, Brookler v. Radio Shack Corp., Hermandez v. Chipotle Mexican Grill, Tien v. Tenet Healthcare, Lamps Plus Overtime Cases, and Santos v. Vitas Healthcare.  However, the California Supreme Court promptly granted review of each of those seven decisions, too, and, like Brinker, those seven decisions can no longer be cited as authority that an employer is not required to ensure that employees take all required meal periods made available to them.  

This state of affairs left employers, employees, and courts tasked with resolving disputes over whether an employer has or has not complied with its obligations to "provide" required meal periods in the dark about what the law requires and has complicated the handling of the innumerable class action wage and hour lawsuits brought against California employers.  

On October 4, 2011, nearly three years after the California Supreme Court granted review of Brinker, the California Supreme Court scheduled the case for oral argument tomorrow, November 8, 2011, beginning at 9:00 a.m.  

The oral argument will be broadcast live on The California Channel.  We are hopeful that the oral argument will provide some insight into how the court might decide the issue.

While it remains difficult to predict how the California Supreme Court will decide the issue, particularly since the composition of the court has changed since the court granted review of the Brinker case in 2008, we do expect that the court's decision will at long last put to rest disputes over what an employer's obligation to "provide" required meal periods means.

Is Your Company Prepared For The California "Wage Theft Prevention Act Of 2011"?

By Christopher S. Andre and Scott K. Dauscher

On October 9, 2011, Governor Jerry Brown signed into law Assembly Bill 469, sponsored by State Assembly Member Sandre R Swanson (Dem. Oakland), which will be known as the "Wage Theft Prevention Act of 2011."  Effective January 1, 2012, the Wage Theft Prevention Act of 2011 will, among other things, subject California employers to new notice and record keeping requirements and to additional penalties for failing to comply with various provisions of the California Labor Code.  Some of the coming changes are as follows: 

1.  The new law amends Labor Code section 98 regarding the procedures used for Labor Commissioner hearings of employee complaints known as "Berman hearings."

2.  The new law adds to the Labor Code section 200.5 to increase from one year to three years the deadline for the Division of Labor Standards Enforcement to commence an action to collect "a civil penalty, fee, or penalty fee."

3.  The new law amends Labor Code section 226 to require employers to show on wage statements (i.e., check stubs) the name and address of the entity that secured the services of the employer, if the employer is a farm labor contractor.

4.  The new law amends Labor Code section 240 to permit the Labor Commissioner to require an employer that has been convicted of violating the provisions of the Labor Code governing the payment of wages or that has failed to pay within the time allowed any judgment for nonpayment of wages to deposit for up to two years a bond "in such sum as the Labor Commissioner may deem sufficient and adequate" that is conditioned upon the requirement that the employer pay its employees in accordance with the provisions of the Labor Code governing the payment of wages and upon the employer paying any judgment(s) for nonpayment of wages.  If an employer fails to post a required bond, the Labor Commissioner can require the employer "to provide an accounting of assets of the employer, including a list of all bank accounts, accounts receivable, personal property, real property, automobiles, or other vehicles, and any other assets, in a form and manner as prescribed by the Labor Commissioner," and can require the employer to provide an amended accounting.  If an employer fails to post a required bond, the employer becomes subject to a civil penalty of up to $10,000, and the Labor Commissioner can bring an action to compel the employer to post the bond or to stop doing business until the employer posts the required bond.

5.  The new law amends Labor Code section 243 to make it easier for an employee or for an attorney for an employee to obtain a court order prohibiting an employer from conducting business for 30 days unless the employer posts a required bond conditioned upon the requirement that the employer pay its employees in accordance with the provisions of the Labor Code governing the payment of wages and upon the employer paying any judgment(s) for nonpayment of wages, if within the preceding 10 years the employer was convicted of violating the provisions of the Labor Code governing the payment of wages or that has failed to pay within the time allowed any judgment for nonpayment of wages.  Further, ""t]o aid in the enforcement of this section, upon a request by the Labor Commissioner or an employee bringing an action . . ., the court may additionally require the employer to provide an accounting of assets of the employer, including a list of all bank accounts, accounts receivable, personal property, real property, automobiles, or other vehicles, and any other assets, in a form and manner as prescribed by the Labor Commissioner," and can require the employer to provide an amended accounting."  

6.  The new law amends Labor Code section 1174 to increase from two years to three years the period of time employers are required to maintain specified records, including records of hours worked and payroll records, and to forbid employers from prohibiting employees from keeping personal records of hours worked or of piece-rate units earned.

7.  The new law adds to the Labor Code section 1194.3 to permit an employee to recover attorney's fees and costs incurred to enforce a judgment for unpaid wages.

8.  The new law amends Labor Code section 1197.1 to permit an employee to recover under that section restitution of unpaid wages in addition to civil penalties.

9.  The new law adds to the Labor Code section 1197.2 to provide for criminal penalties to be imposed against an employer that is able to pay but "willfully fails to pay" a final judgment or a final order of the Labor Commissioner for wages due to an employee whose employment terminated within 90 days of the date the judgment was entered or the order became final. 

10.  The new law adds to the Labor Code section 1206 to state the penalties provided for by the Labor Code are "minimum penalties.

11.  The new law adds to the Labor Code section 2810.5 to require employers to provide to each employee at the time the employee is hired a written notice "in the language the employer normally used to communicate employment-related information to the employee" containing all of the following information: (a) "The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable;" (b) "Allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances," (c) "The regular payday designated by the employer in accordance with the requirements" of the Labor Code, (d) "The name of the employer, including any 'doing business as' names used by the employer," (e) "The physical address of the employer's main office or principal place of business, and a mailing address, if different," (f) the telephone number of the employer, (g) "The name, address, and telephone number of the employer's workers' compensation insurance carrier," and (h) "Any other information the Labor Commissioner deems material and necessary."  Further, except for information shown on "a timely wage statement furnished in accordance with Section 226," employers must also notify employees in writing within seven calendar days of any changes to the information required to be contained in the notice.  Notably, this new section of the Labor Code does not apply persons employed by any state or local government or to any employee covered by a valid collective bargaining agreement, if the agreement "expressly provides for the wages, hours of work, and working conditions of the employee, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of apply for those employees of not less than 30 percent more than the state minimum wage."

We are continuing to analyze the California "Wage Theft Prevention Act of 2011," together with other new employment laws that will become effective January 1, 2012.  Beginning January 1, 2012, California employers will be faced with a bumper crop of new employment laws, and we will comment further here about those new laws.  

In any event, we suggest employers consult with competent employment law counsel now in order to prepare for the new employment laws to become effective January 1, 2012.

New Law To Require Employers That "Willfully" Misclassify Employees As Independent Contractors To Pay Penalties And Wear Scarlett Letter

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, the consequences of misclassifying a worker as an independent contractor who should have been classified as a non-exempt hourly employee can be substantial.  For example, if, because of misclassifying a worker as an independent contractor, the business failed to provide the worker with required meal and rest periods, failed to pay the worker for all hours worked, failed to pay premium pay for overtime hours, and/or failed to provide properly itemized wage statements, the business could become liable for substantial damages for unpaid wages, for various civil penalties, and for attorney's fees. 

On October 9, 2011, Governor Jerry Brown signed into law Senate Bill 459 sponsored by State Senator Ellen M. Corbett (Dem. Alameda County), which will become effective January 1, 2012, which will impose significant additional consequences against employers that "willfully" misclassify an employee as an independent contractor.  Among other things, the new law will:

1.  Make it a violation of the Labor Code for an employer to "willfully" misclassify an employee as an independent contractor.  "'Willful misclassification' means avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor."

2.  Make it a violation of the Labor Code for an employer to charge a person who has been "willfully" misclassified as an independent contractor "a fee, or making any deductions from compensation, for any purpose, including for goods, materials, space, rental, services, government licenses, repairs, equipment maintenance, or fines arising from the individual's employment where any of the acts . . . would have violated the law if the individual had not been misclassified."

3.  Impose civil penalties of at least $5,000.00 and up to $25,000.00 for each violation. 

4.  Require that violations be reported to the State Contractors' License Board if either the Labor and Workforce Development Agency or a court determines that the employer violated the requirements of the new law if the employer is a licensed contractor.  Further, in such cases, the registrar of the Contractors' State License Board is required to initiate disciplinary proceedings against the employer if the order resulted in disbarment of the employer.

5. Require that the Labor and Workforce Development Agency or court order in addition to any other remedy(ies) ordered, "order the person or employer to display prominently on its internet Web site, in an area which is accessible to all employees and the general public, or, if the person or employer does not have an internet Web site, to display prominently in an area that is accessible to all employees and the general public at each location where a violation . . . occurred, a notice that sets forth all of the following:

(1) That the Labor and Workforce Development Agency or a court, as applicable, has found that the person or employer has committed a serious violation of the law by engaging in the willful misclassification of employees.

(2) That the person or employer has changed its business practices in order to avoid committing further violations of this section.

(3) That any employee who believes that he or she is being misclassified as an independent contractor may contact the Labor and Workforce Development Agency.  The notice shall include the mailing address, e-mail address, and telephone number of the agency.

(4) That the notice is being posted pursuant to a state order."

Further, when such a notice is required, it must be signed by an officer of the employer and the notice must be posted for one year commencing on the date of the final decision or order issued by the  Labor and Workforce Development Agency or by a court. 

As we previously reported here, also, California courts will look beyond parties' agreements when evaluating whether a person is an "employee" or an "independent contractor" for purposes of determining whether the numerous provisions of the Labor Code applicable to employees apply.  Typically, the more control a business exercises over how work is done, the more likely it is a California court will find the relationship to be an "employment" relationship and therefore subject to the numerous requirements of the Labor Code and of the Industrial Welfare Commission wage order applicable to the particular industry or occupation.  For example, in  S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 341, the California Supreme Court held there are several factors that must be considered in determining the existence of an employment relationship; while the employer’s right to control the work is the most significant, other factors that must be taken into consideration include “(a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties belief they are creating the relationship of employer-employee.” (Id. at 351.)

Fair Employment and Housing Commission Orders Airline To Pay Over $325,000 For Failing To Accomodate A Customer Service Agent's Disability

By Christopher S. Andre and Scott K. Dauscher

Today, the California Department of Fair Employment and Housing issued a press release announcing the California Fair Employment and Housing Commission ordered an airline to pay over $325,000 to and to reinstate a former employee employed as a customer service agent based on the Commission's findings that the airline failed to reasonably accommodate the former employee's disability.  A copy of the Commission's order stating its findings and determinations can be viewed by clicking here.

As previously reported here, in our experience, cases alleging an employer's failure to accommodate an employee's disability or medical condition are on the rise both administratively (i.e., DFEH actions like the one discussed above) and by way of private lawsuits filed by current or former employees.  Employers should use caution when terminating or otherwise disciplining an employee with a known disability or medical condition to make certain that the termination or other discipline does not run afoul of applicable California law, which is often quite favorable to employees.  Employees with disabilities or medical conditions can lawfully be disciplined or even terminated, but employers should proceed with caution.

California Labor Commissioner Issues $499,000 Citation For Non-Compliant Wage Statements

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, failing to comply with the requirements of Labor Code section 226 regarding the information that must be contained on wage statements (aka check stubs) can create significant liability for California employers.  In defending numerous wage and hour class action lawsuits, one thing is constant.  Such lawsuits nearly always include allegations that the employer failed to provide employees with wage statements that comply with Labor Code section 226, which specifies nine items of information that must be stated on each wage statement.  Such allegations take one or both of the following forms: (1) allegations that the employer did not pay employees for all hours worked and, therefore, failed to comply with the requirement of Labor Code section 226(a)(2) that wage statements show all hours worked and/or (2) allegations that the employer's wage statements fail to comply with the requirements of Labor Code section 226(a) in some other respect, such as failing to include the full name and address of the legal entity that is the employer as required by Labor Code section 226(a)(8).    

It is not hard to understand why plaintiff attorneys pursue claims for allegedly non-compliant wage statements -- the awards of penalties and attorney's fees can be very substantial.  Labor Code section 226(e) states that an employee "suffering injury as a result of a knowing and intentional failure by an employer" to comply with Labor Code section 226(a) is entitled to recover the greater of his or her actual damages or $50.00 for the initial pay period in which a violation takes place and $100 "per employee for each violation in a subsequent pay period" up to $4,000.00 per employee.  Plaintiff attorneys typically also seek additional penalties under the California Labor Code Private Attorneys General Act of 2004, which provides for penalties of $100.00 "for each aggrieved employee per pay period for the initial violation" and $200.00 "for each aggrieved employee per pay period for each subsequent violation."

Further, it is not just private attorneys seeking such penalties.  As we previously reported here, we think federal and state agencies charged with enforcement of federal and state employment laws have taken a more aggressive enforcement posture.  For example, in a recent press release, the California Department of Industrial Relations announced that Labor Commissioner Julie Su issued a $499,000 citation to an employer of warehouse workers for allegedly failing to issue compliant wage statements.  Among other things, Sue stated as follows in the press release: "California law also requires that all employees receive wage statements that explain the basis for their paycheck.  This is to help workers identify if they've been cheated out of their hard-earned wages.  Proper wage statements were not provided to these workers."  Less than a week later, the companies targeted by the Department of Industrial Relations were served with a private class action lawsuit.

California employment law enforcement agencies have recently made it a point to tout such enforcement actions.  As we previously reported here, in a press released issued September 12, 2011, the California Department of Fair Employment and Housing touts an administrative award of $846,300 against an employer for allegedly failing to accommodate an employee's medical condition and for allegedly terminating the employee "relying on [an] insufficient travel pretext." As previously reported here, on September 29, 2011, the Department of Industrial Relations issued a press release touting the filing of a lawsuit seeking damages and penalties in excess of $17 Million against ZipRealty for alleged wage and hour violations.

The good news is the risk of being subjected to such awards of penalties and attorney's fees on account of non-compliant wage statements is generally easily avoided.  We recommend that employers consult  competent employment counsel and take the appropriate steps to make certain that their employees are paid for all hours worked and that the wage statements issued to their employees comply with the requirements of Labor Code section 226.

California Supreme Court Denies Review Of Decision Holding PAGA Waivers Are Unenforceable

By Christopher S. Andre and Scott K. Dauscher

The California Labor Code Private Attorneys General Act of 2004 ("PAGA") permits an "aggrieved" current or former employee to seek on behalf of all other "aggrieved" current and former employees very sizable penalties for violations of many provisions of the California Labor Code and for violations of Industrial Welfare Commission Wage Orders.  PAGA provides for penalties of $100 per employee per pay period for each initial violation and of $200 per employee per pay period for each subsequent violation. A successful PAGA plaintiff is entitled also to an award of his or her attorney's fees and costs, which can also be sizeable.  Plaintiffs bringing class action wage and hour lawsuits now routinely include allegations that their claims fall under PAGA.

When the Supreme Court of the United States issued its landmark decision in AT&T Mobility v. Concepcion we previously discussed here holding that the Federal Arbitration Act preempts contrary state law barring arbitration agreements requiring claimants to pursue their claims individually through arbitration and not by way of a class action lawsuit, many practitioners were optimistic that arbitration agreements could be used to require current or former employees to bring claims for PAGA penalties on an individual basis and not on behalf of other allegedly "aggrieved" current and former employees. 

However, as we previously reported here,  the California Court of Appeal held in Brown v. Ralph's Grocery Company that a provision of that arbitration agreement barring employees from pursuing representative actions under PAGA is unenforceable because, according to that court, the decision of  Supreme Court of the United States in AT&T Mobility v. Concepcion does not apply to representative actions brought under PAGA.  Further, the Court of Appeal remanded the case back to the trial court for a determination of whether the arbitration agreement is enforceable except for the PAGA waiver or is unenforceable in its entirety because of the PAGA waiver.  

Yesterday, the California Supreme Court denied review of the Court of Appeal's decision in Brown v. Ralph's Grocery Company that PAGA waivers are not enforceable.  We think this is a significant setback for California employers because, to date, the only reported decision by a California appellate court regarding the enforceability of a PAGA waiver is the Brown v. Ralph's Grocery Company decision holding that PAGA waivers are not enforceable.  

Federal courts are currently split as to whether PAGA waivers are enforceable.  For example, a number of United States District Courts have concluded PAGA waivers are enforceable. On June 16, 2011, in Quevedo v. Macy's, Inc., the United States District Court for the Western Division of the Central District of California concluded that PAGA waivers are enforceable.  On August 18, 2011, in Nelson v. AT&T Mobility LLC., the United States District Court for the Northern District of California agreed with the conclusion of the court in Quevedo v. Macy's.  On September 19, 2011, in Grabowski v. C.H. Robinson Company.the United States District Court for the Southern District of California likewise held PAGA waivers are enforceable.  However, more recently, on October 5, 2011, in in Urbino v. Orkin Services of California, Inc., the United States District Court for the Southern Division of the Central District of California denied the employer's petition to compel the plaintiff former employee to arbitrate his claims, including his claims for penalties under PAGA on the ground the PAGA waiver contained in an arbitration agreement the former employee signed at the outset of his employment is unconscionable because it is contrary to California public policy and rendered the arbitration agreement unenforceable.  The court explained its view that the right to bring a representative action on behalf some or all of an employer's allegedly "aggrieved" employees cannot be waived by an employee as part of an arbitration agreement or otherwise.  The court concluded, also, that "the waiver in [arbitration] Agreement . . . taints the entirety of the Agreement with illegality" and renders the Agreement unenforceable in its entirety.

In light of the somewhat uncertain state of the law created by the split of authority on this issue, we think employers that have in place or are considering implementing arbitration agreements containing PAGA waivers should promptly consult competent employment law counsel.

Failure To Comply With California Workplace Seating Requirements Puts Employers At Risk

By Christopher S. Andre and Scott K. Dauscher

Most employers in California are subject to the workplace seating requirements contained in the Industrial Welfare Commission Wage Orders, which regulate wages, hours, and working conditions in specified industries and as to specified occupations.  Wage Orders 1-13 and 15 all contain the following seating requirements:

(A)  All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.

(B)  When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

Those requirements are somewhat relaxed as to employees employed in agricultural occupations and as to certain occupations in the construction, drilling, logging, and mining industries.  Wage Order 14, which governs persons employed in an agricultural occupation, requires that "[w]hen the nature of the work reasonably permits the use of seats, suitable seats shall be provided for employees working on or at a machine."  Wage Order 16, which governs certain occupations in the construction, drilling, logging, and mining industries, states, "[w]here practicable and consistent with applicable industry-wide standards, all working employees shall be provided with suitable seats when the nature of the process and the work performed reasonably permits the use of seats."  

The penalties for seating violations can be very substantial.  As we previously reported here, in Bright v. 99¢ Only Stores (2010) 189 Cal.App.4th 1472, the California Court of Appeal held an employee may seek California Labor Code Private Attorneys General Act of 2004  ("PAGA") penalties for alleged violations of an IWC wage order requirement that employers provide employees suitable seats.   The court rejected the employer's argument that PAGA penalties are available only for violations of wage payment laws and concluded such penalties are available for violation of nonwage labor standards contained in the IWC's wage orders. The plaintiff in the case, Eugenia Bright, alleged 99¢ Only Stores violated Section 14 of Wage Order 7-2001 stating all working employees “shall be provided with suitable seats when the nature of the work reasonably permits” such use.  She sought civil penalties under Labor Code section 1198, stating the employment of any employee “under conditions prohibited by” IWC wage orders is unlawful.  The court held civil penalties available under PAGA, consisting of $100 per each "aggrieved employee" per pay period for the first violation and $200 per "aggrieved" employee per pay period for each subsequent violation, could be recovered because no other penalties for violating the seating requirements were provided by law.  As we previously reported here, In Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, which also involved the provisions of Wage Order 7-2001 stating the all working employees “shall be provided with suitable seats when the nature of the work reasonably permits” such use, the California Court of Appeal again held PAGA penalties can be awarded for violations of IWC wage orders.  In so holding, the court rejected Home Depot's contention that PAGA penalties are not available for violation of the wage order because PAGA penalties are available for violations of the Labor Code "except those for which a civil penalty is specifically provided," and the wage order contains its own civil penalty provisions (in lesser amounts than those provided by PAGA).  In response to that argument, the court held Wage Order 7-2001 does not specifically provide a civil penalty for violation of the wage order's seating requirements.  Further, the court noted that the civil penalty provision of the wage order states its penalties are "'[i]n addition to any other civil penalties provided by law,'" which the court interprets to mean the the wage order "does not purport to establish a comprehensive scheme of penalties for violations of the wage order."

In light of the increasingly frequency of class action lawsuits alleging seating requirement violations, it is especially important that employers make certain they are in compliance with the seating requirements contained in the IWC wage orders. Such compliance review should include in most instances looking at both  whether the nature of an employee's work would reasonably permit the use of a seat while working and whether the nature of the work would reasonably permit the employee to use a seat when not engaged in active duties during the workday.  The penalties and attorney's fees can be quite substantial, and we believe most courts would conclude that the nature of the work reasonably permits the use of seats in many instances.  

U.S. District Court Invalidates Arbitration Agreement Containing A PAGA Waiver

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, on July 12, 2011, the California Court of Appeal held in Brown v. Ralph's Grocery Company that the decision of the trial court denying enforcement of a class action waiver contained in an arbitration agreement between Ralph's Grocery Company and its employees was not supported by substantial evidence but held, also, that a provision of that arbitration agreement barring employees from pursuing claims under the California Labor Code Private Attorneys General Act of 2004 ("PAGA") is unenforceable because, according to that court, the recent decision of  Supreme Court of the United States in AT& T Mobility v. Concepcion, previously discussed here, does not apply to representative actions brought under PAGA.  Further, the Court of Appeal remanded the case back to the trial court for a determination of whether the arbitration agreement is enforceable except for the PAGA waiver or is unenforceable in its entirety because of the PAGA waiver.  

On October 5, 2011, in in Urbino v. Orkin Services of California, Inc., the United States District Court for the Southern Division of the Central District of California denied the employer's petition to compel the plaintiff former employee to arbitrate his claims, including his claims for penalties under PAGA on the ground the PAGA waiver contained in an arbitration agreement the former employee signed at the outset of his employment is unconscionable because it is contrary to California public policy and rendered the arbitration agreement unenforceable.  The court explained its view that the right to bring a representative action on behalf some or all of an employer's allegedly "aggrieved" employees cannot be waived by an employee as part of an arbitration agreement or otherwise.  The court concluded, also, that "the waiver in [arbitration] Agreement . . . taints the entirety of the Agreement with illegality" and renders the Agreement unenforceable in its entirety. 

The decision in Urbino if left undisturbed by higher courts is a further setback for California employers, particularly if other United States District Courts follow its reasoning.  Plaintiffs bringing class action wage and hour lawsuits now routinely include allegations that their claims fall under PAGA, which provides for awards of very sizable penalties for violations of many provisions of the California Labor Code when aggregated to account for hundreds or even thousands of class members.  PAGA provides for penalties of $100 per employee per pay period for each initial violation and of $200 per employee per pay period for each subsequent violation.  Further, as we previously reported here and here, California courts hold that PAGA penalties apply, also, to violations of Industrial Welfare Commission Wage Orders. 

The issue of whether an employer can as part of an arbitration agreement require employees to waive their rights to bring PAGA claims seeking the substantial penalties available under PAGA for violations of the Labor Code and/or for violations of Industrial Welfare Commission wage orders seems destined to be further addressed by other appellate courts.  Although California courts have not split on the issue, there is now a split among the United States District Courts.  For example: on June 16, 2011, in Quevedo v. Macy's, Inc., the United States District Court for the Western Division of the Central District of California reached a different result and concluded that PAGA waivers are enforceable.  On August 18, 2011, in Nelson v. AT& T Mobility LLC., the United States District Court for the Northern District of California agreed with the conclusion of the court in Quevedo v. Macy's.  On September 19, 2011, in Grabowski v. C.H. Robinson Company, the United States District Court for the Southern District of California likewise held PAGA waivers are enforceable.

In the meantime, in light of the somewhat uncertain state of the law created by the split of authority on this issue, we think employers that have in place or are considering implementing arbitration agreements containing PAGA waivers should promptly consult competent employment law counsel. 

Governor Brown Signs Bill Further Restricting Use Of Consumer Credit Checks For Employment Purposes

By Andres C. Hurwitz and Christopher S. Andre

Many California employers conduct consumer credit checks as part of the applicant screening process.  The federal Fair Credit Reporting Act and the California Consumer Reporting Agencies Act regulate that process by, among other things, requiring employers to notify job applicants in writing that the employer intends to conduct a consumer credit check, requiring employers to obtain from applicants written authorization to conduct the consumer credit check, and to provide applicants with a copy of any consumer credit reports obtained before taking any adverse action based on the contents of such a report. 

On October 9, 2011, Governor Brown signed Assembly Bill 22, which will further restrict employers’ use of consumer credit checks for employment purposes beginning on January 1, 2012.  The new law will amend section 1785.20.5 of the California Civil Code and add section 1024.5 to the California Labor Code. 

Beginning January 1, 2012, unless the employer is a specified financial institution, an employer or prospective employer may not use a consumer credit report for any employment purpose unless the job position of the position for whom the report is sought is one of the following: 

1. A “managerial position.”  The new law defines that term as “an employee covered by the executive exemption set forth in Wage Order 4 of the Industrial Welfare Commission.”  On its face, this permitted use appears to apply only to persons covered by Industrial Welfare Commission Wage Order 4-2001, which applies to “persons employed in professional, technical, clerical, mechanical, and similar occupations.”  There are currently 17 IWC Wage Orders that, depending on the Wage Order, apply either to a specified industry or to specified occupations. 

2. A position in the California Department of Justice.

3. A sworn peace officer or other law enforcement position.

4. “A position for which the information contained in the report is required by law to be disclosed or obtained.”

5. “A position that involves regular access, for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, to all of the following types of information of any one person:  (A) Bank or credit card account information, (B) Social security number, (C) Date of birth.”

6. “A position in which the person is, or would be, any of the following: (A) A named signatory on the bank or credit card account of the employer.  (B) Authorized to transfer money on behalf of the employer.  (C) Authorized to enter into financial contracts on behalf of the employer.”

7. “A position that involves access to confidential or proprietary information. . . .”

8. “A position that involves regular access to cash totaling ten thousand dollars . . . during the workday.”

Beginning January 1, 2012, in order to use a consumer credit report for one of the seven permitted uses, the employer must also comply with the new disclosure requirements of the new law.  Most notably, as part of the disclosure and authorization process, before requesting a consumer credit report for employment purposes, the employer must provide to the employee or job applicant written notice that a report will be used and identify specifically which of the seven permitted uses is the basis for obtaining the consumer credit report, must inform the employee or job applicant of the source of the report, and must include in the written notice a box the employee or job applicant can check to receive a copy of the report to be obtained. 

Further, if employment is denied in whole or in part on account of information contained in a consumer credit report, the employer must so notify the person subject to the adverse decision and provide the name and the address of the consumer credit reporting agency that supplied the report.

Pro-employer groups have often resisted this type of legislation, taking the position that the information available in a credit report can prove valuable in assessing whether a prospective employee would be a good hire.  The plaintiff bar and pro-employee groups, on the other hand, have often argued that the information in credit reports is invades rights to privacy, and in a challenging economy individuals may have credit blemishes unrelated to bad habits. 

Regardless of the merits, AB 22 has been passed and will become effective January 1, 2012.  Other than specified financial institutions, employers will not be permitted to obtain consumer credit checks for employment purposes unless the employer can specifically identify one of the seven permitted uses, and employers subject to AB 22 (i.e., most employers) must comply with the various written notice requirements.  In light of the existing complexities associated with employers’ use of consumer credit reports and the new requirements of AB 22, employers should consider consulting with competent employment counsel before obtaining consumer credit reports for employment purposes.

GOVERNOR BROWN SIGNS EMPLOYMENT-RELATED BILLS ADDRESSING CREDIT REPORTS, GENDER DISCRIMINATION, E-VERIFY, AND PREGNANCY LEAVE TO CONCLUDE 2011 LEGISLATIVE SESSION

by Jonathan Judge, Robert R. Roginson, and Paul S. Fleck

The 2011 California legislative season closed on October 9, 2011, with the Governor signing numerous bills affecting employers and employment law. Among the bills the Governor signed are bills greatly limiting the use of consumer credit reports by employers, expanding the definition of gender under state discrimination laws, prohibiting local governments from requiring use of E-Verify except were required by federal law, and requiring employers to pay for health insurance coverage during the entire period of pregnancy disability leave. The Governor also vetoed several bills, including those addressing pay cards and mandated bereavement leave. Below is a summary of the employment-law-related bills that were signed or vetoed by the Governor.

Signed bills:

AB 22 (Mendoza) Consumer Credit Reports - This bill prohibits an employer or prospective employer, with the exception of certain financial institutions, from obtaining a consumer credit report, for employment purposes unless the position of the person for whom the report is sought is (1) a position in the state Department of Justice, (2) a managerial position, (3) that of a sworn peace officer or other law enforcement position, (4) a position for which the information contained in the report is required by law to be disclosed or obtained, (5) a position that involves regular access to personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, (6) a position in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf, (7) a position that involves access to confidential or proprietary information, or (8) a position that involves regular access to $10,000 or more of cash.

AB 240 (Bonilla) Wage Recovery: Liquidated Damages - This bill permits an employee to recover liquidated damages pursuant to a complaint brought before the Labor Commissioner alleging payment of less than the minimum wage.

AB 243 (Alejo) Labor Contractors - This bill requires farm labor contractors to disclose in the itemized wage statement the name and address of the legal entity that secured the employer’s services.

AB 436 (Solorio) Prevailing Wages - This bill clarifies a law enacted in 2009 (SBX2-9), which funded prevailing wage enforcement at the Department of Industrial Relations with fees paid from bond proceeds used for public construction projects. AB 436 narrows SBX2-9, specifying that fees tied to projects can be used only to enforce and monitor prevailing wage laws on the specific project. In addition, the new law exempts projects operating under Project Labor Agreements (“PLAs”) from such fees, which may create an incentive for local governments to enter into PLAs.

AB 469 (Swanson) Wages: Civil Penalties - This bill provides that in addition to being subject to a civil penalty, any employer who pays or causes to be paid to any employee a wage less than the minimum fixed by an order of the Industrial Welfare Commission shall be subject to paying restitution of wages to the employee. This bill extends the period within which the Division of Labor Standards Enforcement may commence a collection action from one (1) year to three (3) years. This bill requires an employer to provide each employee, at the time of hiring, with a notice that specifies the rate and the basis of pay and to notify each employee in writing of any changes to the information set forth in the notice within seven (7) calendar days of the changes unless such changes are reflected on a timely wage statement or another writing.

AB 514 (Hernandez) Prevailing Wages: Hauling Refuse - This bill includes in the definition of “hauling of refuse” the hauling of specified materials other than certain recyclable metals, thereby expanding the definition of “public works” and thus requiring the payment of prevailing wages for that activity.

AB 551 (Campos) Prevailing Wages: Penalties - This bill increases the maximum penalty from $50 to $200 for each calendar day and increases the minimum penalty except in certain cases of a good faith mistake from $10 to no less than $40 for each calendar day for violations of prevailing wage provisions. The bill also increases the penalty assessed to contractors and subcontractors with prior violations from $20 to $80, and from $30 to $120 for willful violations. This bill increases the amount the penalty from $25 to $100 for each calendar day for each worker to provide certified payroll records following a written request for such records.

This bill provides that contractors or subcontractors on a public works project that are found to have committed two (2) or more separate willful violations within a three (3) year period be debarred up to three (3) years. The bill also subjects contractors and subcontractors to debarment of one (1) to three (3) years if certified payroll records are not produced within 30 days after receipt of the written notice from the Division of Apprenticeship Labor Standards Enforcement, Division of Apprenticeship Standards, or the awarding body.

AB 587 (Gordon) Public Works/Volunteers - This bill extends the repeal date to January 1, 2017, for the law that exempts specified work performed by a volunteer, a volunteer coordinator, or a member of the California Conservation Corps or a community conservation corps from public works provisions.

AB 592 (Lara) Leaves - This bill formally recognizes that it is an unlawful employment practice for an employer to interfere with any right provided to an employee under the California Family Rights Act or Pregnancy Disability Leave law.

AB 766 (Monning) Public Works - This bill requires nonredacted copies of certified payroll records to be provided, upon request, to any agency included in, and for the purposes of, the Joint Enforcement Strike Force on the Underground Economy, or to any law enforcement agency.

AB 887 (Atkins) Gender Discrimination - This bill makes changes to state discrimination law by refining the definition of gender to include a person’s gender identity and gender expression. Gender expression would be defined as meaning a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.

AB 1236 (Fong) Use of E-Verify - The bill prohibits the state, a city, county, or special district, from requiring an employer other than one of those government entities to use an electronic employment verification system (E-Verify) except when required by federal law or as a condition of receiving federal funds.

AB 1396 (Committee On Labor & Employment) Commissions Agreements - This bill requires all employers, within the state, or from out-of-state, to enter into written contracts of employment where commissions are a method of payment with the employee for services rendered in the state.

SB 126 (Steinberg) Agricultural Labor Relations - This bill revises election, bargaining, and unfair labor practice procedures before the Agricultural Labor Relations Board.

SB 136 (Yee) Prevailing Wages: Energy - This expands the definition of “public works,” to include any construction, alteration, demolition, installation, or repair work done under private contract where the following conditions exist: (a) The work is performed in connection with the construction or maintenance of renewable energy generating capacity or energy efficiency improvements; (b) The work is performed on the property of the state or a political subdivision of the state; and (c) Either of the following conditions exists: (1) More than 50 percent of the energy generated is purchased or will be purchased by the state or a political subdivision of the state; or (2) The energy efficiency improvements are primarily intended to reduce energy costs that would otherwise be incurred by the state or a political subdivision of the state.

SB 272 (DeSaulnier) Leave of Absence: Organ Donation - This bill provides that the days of leave for purposes of bone marrow and organ donation leave are business days rather than calendar days, and that the one-year period is measured from the date the employee’s leave begins and consists of 12 consecutive months. This bill also provides that such a leave of absence is not a break in the employee’s continuous service for the purpose of his or her right to paid time off. This bill further provides that the employer may condition the initial receipt of leave upon the employee’s use of earned but unused days for paid time off. Additionally, the bill states that it is declaratory of existing law.

SB 299 (Evans) Pregnancy Leave - This bill prohibits an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes Pregnancy Disability Leave.

SB 459 (Corbett) Independent Contractors - This bill prohibits willful misclassification of individuals as independent contractors. The bill also authorizes the Labor Commissioner to assess civil and liquidated damages against a person or employer based on a determination that the person or employer violated these prohibitions.

SB 559 (Padilla) Discrimination: Genetic Information - This bill prohibits discrimination under the Fair Employment and Housing Act and Unruh Civil Rights Act on the basis of genetic information.

SB 757 (Lieu) Health Insurance Plan Discrimination - This bill prohibits group health insurance plans or policies from discriminating in coverage between spouses or domestic partners of a different sex and spouses or domestic partners of the same sex.

SB 922 (Steinberg) Project Labor Agreements - This bill requires local governments or public entities that have passed ordinances banning PLAs for public construction projects to repeal such rules or lose state funding for state-involved projects. This bill also establishes requirements for PLAs to include provisions addressing prohibitions against discrimination, open bidding for union and non-union contractors, drug testing, guarantees against strikes, lock-outs and other similar disruptions, and arbitration of disputes.

Vetoed bills:

AB 267 (Swanson) Employment Contracts - This bill would have made void and unenforceable as against public policy any provision in an employment contract that requires an employee, as a condition of obtaining or continuing employment, to use a forum other than California, or to agree to a choice of law other than California law, to resolve any dispute with an employer regarding employment-related issues that arise in California.

AB 325 (Lowenthal) Bereavement Leave - This bill would have allowed for four days unpaid leave for bereavement purposes upon the death of a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or domestic partner’s child, within 13 months of the death of the bereaved individual. The provisions of the bill would not have applied to an employee who is covered by a valid CBA that provides for bereavement leave and other specified working conditions.

SB 104 (Steinberg) Labor Representatives: Elections - This bill would have permitted agricultural employees, as an alternative procedure, to select their labor representatives by submitting a petition to the board accompanied by representation cards signed by a majority of the bargaining unit.

SB 931 (Evans) Payroll Cards - This bill would have formally authorized employers to pay employees’ wages by means of payroll cards under the California Labor Code. According to the Governor’s veto message, while pay cards are used by thousands of California employees and employers, this bill would have imposed numerous and costly new requirements on pay card providers, which may likely have resulted in banks and employers stopping to offer such services.

Supreme Court of the United States Vacates $ 7.7 Million Class Action Verdict Against Employer Based On The Court's Decision In Wal-Mart Stores, Inc. v. Dukes

By Christopher S. Andre and Scott K. Dauscher

Yesterday, the Supreme Court of the United States summarily disposed of the petition for a writ of certiori filed by Chinese Daily News, Inc., challenging the decision of the Ninth Circuit Court of Appeals affirming a $7.7 Million class action wage and hour verdict against Chinese Daily News.  In a summary disposition, the Supreme Court granted the petition for certiori, vacated the judgment, and remained the case back to the Ninth Circuit for further consideration in light of the Supreme Court's landmark decision in Wal-Mart Stores, Inc. v. Dukes.

We will report further on this development once the Ninth Circuit Court of Appeals has acted.