California Employment Law Report

California Employment Law Report

The latest litigation trends, court decisions, & issues on California Employment Law

Mileage reimbursement issues under California law

Expense reimbursement may seem like a small issue in comparison with the other areas of liability facing California employers, but the Old Carexposure for not appropriately reimbursing employees can be substantial. In Gattuso v. Harte-Hanks Shoppers, Inc., the California Supreme Court clarified the parameters of mileage reimbursement under California law, as well as the three different methods available for employers to reimburse employees for their mileage reimbursement.  This Friday’s Five post discusses five issues employers need to know about automobile and mileage reimbursement under California law.

1. Mileage reimbursement based on IRS mileage rate is presumed to reimburse employee for all actual expenses

The IRS publishes standard mileage rates each year (and sometimes adjusts these rates during the year). The 2017 IRS mileage rate is as follows:

  • 53.5 cents per mile for business miles driven, down from 54 cents for 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

If the employee challenges the amount reimbursed, the employee bears the burden to show how the “amount that the employer has paid is less than the actual expenses that the employee has necessarily incurred for work-required automobile use (as calculated using the actual expense method), the employer must make up the difference.” Gattuso, at 479.

The California Supreme Court also held that the reimbursement rate can be negotiated by parties as long as it fully reimburses the employee, and the amount does not have to be set at the IRS mileage rate. The Court also warned that employee cannot waive the right to be fully reimbursed for their actual expenses:

We agree that, as with other terms and conditions of employment, a mileage rate for automobile expense reimbursement may be a subject of negotiation and agreement between employer and employee. Under section 2804, however, any agreement made by the employee is null and void insofar as it waives the employee’s rights to full expense reimbursement under [Labor Code] section 2802.

Gattuso, at 479.

2. Actual expense method of reimbursement

In examining the different methods of reimbursement, the Supreme Court held that the actual expense method is the most accurate, but it is also the most burdensome for both the employer and the employee. Gattuso, at 478. Under the actual expense method, the parties calculate the automobile expenses that the employee actually and necessarily incurred and then the employer separately pays the employee that amount. The actual expenses of using an employee’s personal automobile for business purposes include: fuel, maintenance, repairs, insurance, registration, and depreciation.

3. Mileage reimbursement method

The Court recognized that employers may simplify calculating the amount owed to an employee by paying an amount based on a “total mileage driven.” Gattuso, at 479.

Under the mileage reimbursement method, the employee only needs to keep a record of the number of miles driven for job duties. The employer then multiplies the miles driven by a predetermined amount that approximates the per-mile cost of owning and operating an automobile. The Court recognized that the mileage rate agreed to between the employer and employee is “merely an approximation of actual expenses” and is less accurate than the actual expense method. It is important to note that while this amount can be negotiated, the employee still is unable to waive their right to reimbursement of their actual costs as mentioned above.

4. Lump sum payment method

Under the lump sum method, the employee need not submit any information to the employer about work-required miles driven or automobile expenses incurred. The employer merely pays an agreed fixed amount for automobile expense reimbursement. Gattuso, at 480. This type of lump sum payment is often labeled as a per diem, car allowance, or gas stipend.

In Gattuso, the Court made it clear that employers paying a lump sum amount have the extra burden of separately identifying and documenting the amounts that represent payment for labor performed and the amounts that represent reimbursement for business expenses.

5. Don’t forget about other expenses incurred in the “course and scope” of working

In addition to mileage, employers may also have to reimburse employees for other costs they incurred in driving their personal cars for business. In making the determination about whether an employee’s actions are in the “course and scope” of their job, courts examine whether the expense being sought by the employee is “not so unusual or startling that it would seem unfair to include loss or expense among other costs of the employer’s business.” Employers need to be mindful about reimbursing employees for cell phone use, printing and office supplies (if employee is required to maintain a home office or use personal printer for work), and other work related expenses.

Employment practices audit: five areas to review

Happy Friday!  This Friday’s Five covers five areas that employers can start with in conducting an employment practices Checklistsaudit.  Coming up on the mid-point of the year, it is a good time to conduct an employment law practices audit to ensure that policies are compliant, managers are properly trained, and the company is maintaining the required records for the necessary length of time.  Here are five areas to start with in conducting an audit and a few recommended questions for each topic:

1. Hiring Practices

  • Are applications seeking appropriate information?
    • For example: Be careful about local ban the box regulations.
  • Are new hires provided with required policies and notices?
  • Are new hires provided and acknowledge recommended policies?
    • For example: meal period waivers for shifts less than six hours
  • Are hiring managers trained about the correct questions to ask during the interview?
  • Does the company provide new hires (and existing employees) with arbitration agreements with class action waivers?

 2. Records

  • Are employee files maintained confidentially and for at least four years?
  • Are employee time records maintained for at least four years?
  • Are employee schedules maintained for at least four year?
  • Do the managers have set forms for the following:
    • Employee discipline and write-ups
    • Documenting employee tardiness
  • How is the employee documentation provided to Human Resources or the appropriate manager?
  • Who is involved in reviewing disability accommodation requests?
  • How are employee absences documented?

3. Wage and Hour Issues

  • Does the company have its workweeks and paydays established?
  • Are pay days within the applicable time limits after the pay period as required under the law?
  • Are employees provided with compliant itemized wage statements?
  • Are employees provided a writing setting out their accrued paid sick leave each pay period?
  • Are employees properly classified as exempt or nonexempt?
    • For exempt employees, review their duties and salary to ensure they meet the legal requirements to be an exempt employee.
  • Any workers classified as independent contractors, and if so, could they be considered employees?
  • Are nonexempt employees properly compensated for all overtime worked?
  • Is off-the-clock work prohibited?
    • Policy in place?
    • Are managers trained about how to recognize it and what disciplinary actions to take if find employees working off-the-clock?
  • Does the company’s time keeping system round employee’s time?
    • If so, is the rounding policy compliant with the law?
  • Are meal and rest period polices set out in handbook and employees routinely reminded of policies?
    • Does the company pay “premium pay” for missed meal and rest breaks? If so, how is this documented on the employee pay stub?
    • Do employees record meal breaks?
    • Are managers trained on how to administer breaks and what actions to take if employees miss meal or rest breaks?
  • Is vacation properly documented and tracked?
  • Are all deductions from the employee’s pay check legally permitted? (use caution, very few deductions are permitted under CA law)
  • Are employees reimbursed for all business expenses, such as uniforms, work equipment and miles driven for work?

 4.End of Employment Issues

  • Are employees leaving the company provided their final wages, including payment for all accrued and unused vacation time?
  • Does the employer deduct any items from an employee’s final paycheck?
    • If so, are the deductions legally permitted?

5. Anti-harassment, discrimination and retaliation

  • Are supervisors provided with sexual harassment training every two years? (If employer has 50 or more employees, supervisors are legally required to have a two-hour harassment prevention training that complies with AB 1825 and amendments to this law).
  • Are supervisors and managers mentioning the open-door policy of the company to employees at routine meetings with employees? Is this being documented?

Please let me know if you have any other items your company considers during review of employment policies – it would be great to update this list to share with readers.  Have a great weekend.

House passes the “Working Family Flexibility Act” – what California employers need to understand

This Friday’s Five comes on Cinco de Mayo – how appropriate.  The U.S. House of Representatives passed the Working Family Flexibility Act, now it is being consideredfamily - school by the Senate.  President Trump has indicated that he would sign the bill if it makes it to his desk.  Five issues California employers need to understand surrounding comp time:

1. What does the Working Family Flexibility Act provide?

The law passed by the U.S. House of Representatives adds sections to the Fair Labor Standards Act (FLSA) by allowing employers to offer employees compensatory time instead of paying them for overtime worked.  The bill provides for the following:

  • Comp time is accrued at the rate of not less than one and one-half hours for each hour of overtime pay is required under the FLSA;
  • Private employers that are not unionized are required to enter into a written agreement with the employee about the comp time, and the agreement must be voluntarily entered into by the employee; and
  • The employee must have worked for the employer for at least 1,000 hours for the employer for a continuous period in the 12-month period before being eligible for comp time.

2. The Federal legislation will unlikely effect California employers

California law generally prohibits most employers from offering comp time in lieu of paid overtime.  California law requires employers to pay overtime on a more stringent basis than the FLSA (below is a description of California’s daily overtime requirements).  California’s Labor Code specifically prohibits any employee from waiving their rights to overtime under the Labor Code.  See Section 1194.  Therefore, because California law is more stringent and provides employees more protection than the FLSA (and the proposed Working Family Flexibility Act), California employers would still need to comply with California law even if the Working Family Flexibly Act is passed into federal law.

3. California’s unwaivable daily overtime requirements

Under California’s Labor Code, time and a half overtime is due for (1) time over eight hours in one day or (2) over 40 hours in one week or (3) the first eight hours worked on the seventh consecutive day worked in a single workweek; and double time is due for (1) time over 12 hours in one day and (2) hours worked beyond eight on the seventh consecutive day in a single workweek. The DLSE provides a good summary here.

4. California employers can offer makeup time to employees, but there are strict requirements that must be meet

California employers are not without any options however, as it is easy to forget the one form of flexibility provided to California employers: makeup time. This provision allows employers to avoid paying overtime when employees want to take off an equivalent amount of time during the same work week. There are, however, a few requirements that must be met to ensure that the employer is not required to pay overtime for the makeup time.  For instance:

  • An employee may work no more than 11 hours on another workday, and not more than 40 hours in the workweek to make up for the time off;
  • The time missed must be made up within the same workweek;
  • The employee needs to provide a signed written request to the employer for each occasion that they want to makeup time (and if employers permit makeup time, they should have a carefully drafted policy on makeup time and a system to document employee requests); and
  • Employers cannot solicit or encourage employees to request makeup time, but employers may inform employees of this option.

5. Will the federal legislation influence California to provide similar flexibility to workers?

If the Working Family Flexibility Act becomes federal law, it is unlikely to influence California’s legislators to draft a similar state law.  The Democrats in the U.S. House all voted against the bill, and the left is vehemently opposed to the bill, even though it provides for the payment of all comp time accrued but not used when the employee leaves employment.  Such opposition from the Democrats make it unlikely to be considered in the California legislature.

 

Top five things to know about tips, gratuities and service charges under California law

The basics of tipsWelcome to another Friday’s Five. This week is a discussion about issues facing restaurants, hotels, and other industries where tipping and gratuities are left for employees.  This simple concept is surprisingly complex for employers.  Here are five issues employers should understand about tips in California.

1) Who owns a tip?

California law is clear that voluntary tips left for an employee for goods sold or services performed belong to the employee, not the employer. Labor Code section 351 provides, “No Employer or agent shall collect, take or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron…. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.”

2) Is employer mandated tip pooling legal?

Yes. In the seminal 1990 case on tip-pooling, Leighton v. Old Heidelberg, Ltd., the court held that an employer’s practice of tip pooling among employees was not prohibited by section 351 because the employer did not “collect, take, or receive” any part of a gratuity left by a patron, and did not credit tips or deduct tip income from employee wages. The court relied upon the “industry practice” that 15% of the gratuity is tipped out to the busboy and 5% to the bartender, which was “a house rule and is with nearly all Restaurants.” However, owners, managers, or supervisors of the business cannot share in the tip pool.  Employers need to be careful to exclude any employees who direct the work of other employees from tip pools, as lead shift supervisors, floor managers, and others who do not have the authority to hire or fire may still be considered a supervisor for tip pooling purposes.

There must be a reasonable relationship between tip pooling arrangements.  The following examples of mandatory tip pooling percentages have been approved by a court, the DLSE or DOL:

  • A policy in which 80 percent of tips were allocated to waiters, 15 percent to busboys and five percent to bartenders
  • A policy in which cocktail service must give one percent of tips to bartender
  • The Department of Labor responsible for enforcing Federal law has stated that a policy that requires servers to share 15 percent of their tips with other employees is presumptively reasonable
  • A policy in which a server contributes 15 percent to a tip pool, and other employees in the chain of service receive a portion of these tips based on the amount of hours they worked

The following examples were tip pooling policies disapproved by courts or the DLSE and therefore employers cannot legally establish them:

  • A policy providing 90 percent of tips to hostesses who spend only a small amount of time seating customers
  • A policy requiring food server to share 10 percent of tips with floor managers

3) When do tip tips left on credit cards have to be paid, and can a deduction made for processing the credit card transaction?

If a patron leaves a tip on their credit card, the employer may not deduct any credit card processing fees from the tip left for the employee. Moreover, tips left using a credit card must be paid to employees no later than the next regular payday following the date the credit card payment was authorized. See Labor Code § 351.

4) Can California employers have back of the house employees share in a tip pool?

No (as of April 2017), but this could change.  The Court in Oregon Restaurant and Lodging Association v. Perez, the Ninth Circuit Court of Appeals, which covers California, held in February 2016 that the Department of Labor’s regulations about who can participate in tip pools applies to states like California which do not permit tip credits.  The DOL has issued regulations that under the FLSA a tip pool is only valid if it includes employees who “customarily and regularly” receive tips, such as waiters, waitresses, bellhops, counter personnel who service customers, bussers and service bartenders.  According to the DOL, a valid tip pool “may not include employees who do not customarily and regularly receive[] tips, such as dishwashers, cooks, chefs, and janitors.”  The Plaintiffs in Oregon Restaurant filed a petition for review to the United State Supreme Court.  The Supreme Court will likely decide whether to hear the case in 2017.  Therefore, until any further clarification from the Supreme Court, it is best that restaurants use caution and not include back of the house employees who are not customarily and regularly tipped in tip pools.

While some states provide the employer with a “tip credit”, California law does not allow this. However, with the recent passage of the increase in California’s minimum wage, there is more discussion of examining whether a tip credit should be considered in California. However, current law does not allow employers to “credit” an employee’s tips towards the minimum wage requirement for each hour worked.

A service charge added to a customer’s bill is not a tip or gratuity and remains the property of the employer.  Therefore, the employer may distribute the service charge to its employees, including back of the house employees as it wishes.  However, if a service charge is distributed to employees, it is considered wages and effects the employee’s regular rate of pay for overtime purposes as discussed below.

5) Do tips change an employee’s regular rate of pay for overtime calculations?

No. Because tips are voluntarily left by customers to employees, tips do not increase an employee’s regular rate of pay used to calculate overtime rates.

However, if an employer implements mandatory service charges and shares these service charges with employees, the service charges must be considered wages for overtime and tax purposes.  Therefore, the employee’s regular rate of pay for overtime purposes will be higher when mandatory service charges are distributed to the employees.  To calculate an employee’s regular rate of pay, the employer must divide all compensation for the week by the total number of hours worked by the employee.

**Additional issue: Pay attention to other requirements under local ordinances regulating service charges.

For example, Santa Monica’s minimum wage ordinance requires employers to “distribute all Service Charges in their entirety to the Employee(s) who performed services for the customers from whom the Service Charges are collected.”  Santa Monica Municipal Code § 4.62.040.  “Service Charge” is defined as “any separately-designated amount charged and collected by an Employer from customers, that is for service by Employees, or is described in such a way that customers might reasonably believe that the amount is for those services or is otherwise to be paid or payable directly to Employees…under the term ‘service charge,’ ‘table charge,’ porterage charge,’ ‘automatic gratuity charge,’ ‘healthcare surcharge,’ ‘benefits surcharge,’ or similar language.”  Santa Monica Municipal Code § 4.62.010(g).

Five common questions about California’s paid sick leave requirements

Almost two years after California’s requirement to provide employees with paid sick leave, there are still many outstanding questions about California’s Healthy Workplace Healthy Family Act of 2014.  These issues still exist even after Governor Jerry Brown signed Senate Bill 3 on April 2016 amending the Act attempting to clarify a few provisions of the law.

In this Friday’s Five video I discuss a few of the common questions employers still have about the law, such as:

  • When can attendance policies violate the law?
  • Can employers require doctor’s notes from employees who take paid sick leave?
  • Can employers discipline employees to taking leave and not providing advance notice after they exhausted their paid sick leave?

For more information, visit the Department of Industrial Relations frequently asked questions page here.

Also, don’t forget to subscribe to the Employment Law Report’s YouTube channel to receive notification about new videos.

Sorry for the late post, but there were some server upgrades for my blog on Friday.  Have a great week.

Friday’s Five: Meal and rest break update

Welcome to another Friday’s Five video.  In this video I discuss five things every California employer needs to know about meal and rest breaks.  The items consists of a some reminders, but also new court decisions issued in December 2016 and the first quarter of 2017.  This is always a topic employers need to continually pay attention to in California.

Here are links to articles I’ve published as referenced in the video:
Timing requirements for meal and rest breaks

Rest break requirements when employees still subject to recall by employer

Commissioned and piece rate employees must be compensated separately for rest breaks

Happy Friday.  As always, please let me know if you have any suggestions for topics for future posts.

Five steps to prepare for July 2017 local minimum wage increases in California

Many cities and counties across California are set to increase their minimum wages in July 2017, and employers need to start preparing now.  For example, Los Angeles City and County are increasing the minimum wage for employers with 26 or more employees to $12 per hour on July 1, 2017 (currently at $10.50 per hour). This Friday’s Five video covers five issues that employers should start to review in order to comply with these increases in the minimum wage.

For more information about the local minimum wages in place throughout California:

San Diego: http://www.californiaemploymentlawrep…

Los Angeles: http://www.californiaemploymentlawrep… and http://www.californiaemploymentlawrep…

Southern California overview of various minimum wage requirements: http://www.californiaemploymentlawrep…

Sample model pay stub: https://www.dir.ca.gov/dlse/PayStub.pdf

 

Five reminders about exempt employees working in the restaurant industry

In a recent decision, Ramirez v. ISB Mehta Corp., a restaurant successfully defended a lawsuit filed by a former manager claiming that he was misclassified as an exempt employee.  While the case is not officially published, it provides a few good lessons for restaurant operators’ classification of their employees.  This Friday’s Five focuses on the lessons illustrated by this case:

1. Employers must approach classifying employees as exempt carefully

In Ramirez v. ISB Mehta, the plaintiff worked for Erik’s DeliCafe, a franchised restaurant in the Bay Area.  The plaintiff filed a class action alleging that he was misclassified as an exempt employee and was entitled to overtime compensation because his duties as a manager primarily involved nonexempt work.

The plaintiff testified that his daily duties including counting cash, entering daily sales information, making daily bank deposits, writing checks, placing food orders, buying produce, marketing, preparing and delivering catering orders, and working the register (taking walk-in customer orders). Defendant provided plaintiff with a cell phone, but paid plaintiff $100 a month for the service.

The trial court rejected plaintiff’s overtime compensation and minimum wage claims, finding that he was an exempt employee under both the executive and administrative exemptions defined in Industrial Welfare Commission Wage Order No. 5-2001.  The court found that plaintiff was primarily engaged in activities falling within those exemptions, such as:

  • directing the work of others;
  • authorized to hire and fire;
  • customarily and regularly exercising independent judgment; and
  • regularly and directly assisting the owner of the business

The evidence established that the employee’s duties and responsibilities also involved performance of non-manual work directly related to management policies or general business operations, and Employee was paid a salary more than twice the minimum wage.

Click here for common exempt classifications.

2. To meet the executive exemption, the employer must meet six requirements

The court explained to meet the executive exemption, the following must be met:

The executive exemption has six components: (1) the employee’s “duties and responsibilities involve the management of the enterprise in which he/she is employed,” (2) the employee “customarily and regularly directs the work of two or more other employees,” (3) the employee “has the authority to hire or fire other employees …,” (4) the employee “customarily and regularly exercises discretion and independent judgment,” and (5) the employee earns a monthly salary “no less than two (2) times the state minimum wage for full time [40 hour per week] employment.” (Cal. Code Regs, tit. 8, § 11050, subd. 1(B)(1)(a)-(d), (f).)

The remaining component, at issue here, requires the employee to be “primarily engaged in duties which meet the test of the exemption.” (Cal. Code Regs, tit. 8, § 11050, subd. 1(B)(1)(e).)

3. Factors to review when employee is performing both exempt and nonexempt duties to determine if the employee spends more than 50% of their time on exempt duties

The court set out the factors used in determining if the employee spends more than 50% of their time on managerial duties when the employee performs both managerial and non-managerial work:

Work performed by a nonexempt employee is generally nonexempt work when performed by the supervisor; (2) the regulations do not recognize hybrid activities (activities having both exempt and nonexempt aspects); (3) identical tasks may be exempt or nonexempt depending on the manager’s purpose in engaging in the task or the task’s role in the work of the organization; and (4) in large retail establishments when certain tasks are customarily assigned to nonexempt employees, the performance of that work by a manager is nonexempt. (Heyen, supra, 216 Cal.App.4th at pp. 822-823.)

The court found that in this case bookkeeping tasks, maintaining inventory and ordering supplies and marketing the restaurant were exempt duties.

Click here for my prior article for examples of duties that usually are exempt duties.

4. Employers bear the burden to prove that an employee is exempt

California courts have made clear that the employer bears the burden of proof when asserting that an employee is an exempt employee.  “[T]he assertion of an exemption from the overtime laws is considered to be an affirmative defense, and therefore the employer bears the burden of proving the employee’s exemption.”  Ramirez v. Yosemite Water Co. (1999).

5. Even though the employer prevailed in this lawsuit, it can be risky to classify restaurant managers classified as exempt

While the employer prevailed in this case, the case illustrates the close factual analysis required in determining whether an employee meets an exempt classification.  Especially in the restaurant context, it is likely that managers will be performing both nonexempt and exempt duties.  It is very easy for disgruntled employees to contend after the fact that their duties primarily consisted of nonexempt, non-managerial tasks.

California proposed immigration bill imposes steep fines for employers who cooperate with federal immigration requests

Assemblymember David Chiu (D-San Francisco) introduced a bill – AB 450 – that would put employers between the federal government and the state of California in the immigration debate.  Basically, the bill imposes penalties on employers who cooperate or do not notify the state of federal immigration actions taking place at their locations.  As set out in a statement issued by Assemblymember Chiu, the bill does the following:

  • Protecting workers from being wrongfully detained in their workplace by requiring employers to ask for a judicial warrant before granting ICE access to a worksite.
  • Preventing employers from sharing confidential employee information, such as a social security number, without a subpoena.
  • Requiring employers to notify the Labor Commissioner and employee representative of a worksite raid. Employers must also notify the Labor Commissioner, employees, and employee representatives of an I-9 audit.
  • Preventing employers from retaliating against employees who report labor claims by enabling workers crucial to a labor claim investigation to receive certification from the Labor Commissioner. This certification would both protect the worker and aid in successfully adjudicating labor violations.

The current version of the bill creates the following obligations for employers:

  • prohibit an employer from providing a federal immigration enforcement agent access to a place of labor without a properly executed warrant and would prohibit an employer, or a person acting on behalf of the employer, from providing voluntary access to a federal government immigration enforcement agent to the employer’s employee records without a subpoena
  • require an employer to provide an employee, and the employee’s representative, a written notice containing specified information, in the language the employer normally uses to communicate employment information, of an immigration worksite enforcement action to be conducted by a federal immigration agency at the employer’s worksite, unless prohibited by federal law
  • require an employer to provide to an affected employee, and to the employee’s representative, a copy of the written federal immigration agency notice describing the results of an immigration worksite enforcement audit or inspection and written notice of the obligations of the employer and the affected employee arising from the action
  • require an employer to notify the Labor Commissioner of a federal government immigration agency immigration worksite enforcement action within 24 hours of receiving notice of the action and, if the employer does not receive advance notice, to immediately notify the Labor Commission upon learning of the action, unless prohibited by federal law
  • require an employer to notify the Labor Commissioner before conducting a self-audit or inspection of specified employment eligibility verification forms, and before checking the employee work authorization documents of a current employee, unless prohibited by federal law

Failure to meet any of the obligations would create liability for employers of not less than $10,000 and not more than $25,000 for each violation.  This creates a potential legal conundrum for employers who have a responsibility to comply with federal immigration laws.  Under this proposed bill employers could face fines under state law for not following these requirements, but on the other hand employers face penalties for not complying with federal immigration laws.  The bill makes employers responsible for these difficult legal determinations in interpreting state and federal obligations, in addition to requiring them to become legal experts in determining if the federal government has a “properly executed search warrant” for example.

Friday’s Five: When hugs can constitute harassment

Plaintiff Victoria Ztwick worked as a correctional office for the County of Yolo. See Zetwick v. County of Yolo.  She sued thekids hugging County and her supervisor, Sheriff Edward Prieto alleging that the supervisor’s conduct over a 12-year period created a hostile work environment.  She alleged the harassment consisted of Prieto hugging her on more than one hundred occasions and kissed her at least once.

Ztwick alleged Prieto created a sexually hostile work environment, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the California Fair Employment and Housing Act (FEHA), CAL. GOV’T CODE § 12900 et seq.  Defendants argued that that such conduct was not objectively severe or pervasive enough to establish a hostile work environment under the law.  Defendants maintained that the activity was innocuous, socially acceptable conduct.  The lower trial court agreed with defendants’ arguments and granted their motion for summary judgment.  However, the Ninth Circuit court of Appeals overturned the trial’s court’s order and remanded the case to the lower court for trial.  This Friday’s Five focuses on five lessons employers should take away from the Zetwick v. County of Yolo case.

1. Hugging can create a hostile work environment

Defendants maintained that most of the hugs were during parties involving sheriff’s office employees, award banquets, GED graduations for prisoners, and some training sessions or meetings, but never when Prieto and the plaintiff were alone.  Plaintiff admitted that there was only one incident that Prieto kissed her at an awards ceremony.  He kissed plaintiff to congratulate her on her recent marriage, and plaintiff alleged that the kiss was partially on the lips because she turned her head.  She alleges she complained to her supervising lieutenants, but they did not forward the complaint for any investigation or resolution.

Plaintiff alleges that she also saw Prieto hug and kiss other female employees, but never saw him hug male employees.  Defendants argued that even Plaintiff herself described the hugs as ones that friends or relatives give each other.  In addition, defendants contended that plaintiff simply never saw when Prieto would hug male co-workers and that the hugs were not only directed towards plaintiff or females.

To succeed in proving hostile work environment harassment, a plaintiff must prove “(1) that he was subjected to verbal or physical conduct of a harassing nature, (2) that this conduct was unwelcome, and (3) that the conduct was sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.”

The appellate court held that there was enough evidence presented by plaintiff to at least have a trial:

We hold that, giving the record proper consideration, a reasonable juror could conclude that the differences in hugging of men and women were not, as the defendants argue, just “genuine but innocuous differences in the ways men and women routinely interact with members of the same sex and of the opposite sex.”

2. To be illegal, harassment must be both objectively offensive to a reasonable person and subjectively offensive in that the victim felt it was offensive

The appellate court set forth the standard required for a victim to allege harassment:

To be actionable under Title VII, a sexually objectionable environment must be both objectively and subjectively offensive, one that a reasonable person would find hostile or abusive, and one that the victim in fact did perceive to be so.” Geo Grp., Inc., 816 F.3d at 1206 (internal quotation marks omitted).

The appellate court found that given the testimony that Prieto hugged plaintiff more than one hundred times over a 12-year period, hugged female employees more often than male employees, and as plaintiff observed Prieto only hugging females, that plaintiff met the subjective and objective showing requirement.  This evidence was sufficient to establish the possibility that a reasonable jury could find in plaintiff’s favor.

3. Hugging could be outside of the “ordinary workplace socializing”

In rejecting defendants’ argument that the hugs in this case were “ordinary workplace socializing” that could not be the basis of a sexual harassment lawsuit, the court explained:

[W]hile it may appear that Prieto’s hugs were “common” in the workplace, and that some other crossgender hugging occurred, neither of those things demonstrates beyond dispute that Prieto’s hugging was within the scope of “ordinary workplace socializing.” A reasonable juror could find, for example, from the frequency of the hugs, that Prieto’s conduct was out of proportion to “ordinary workplace socializing” and had, instead, become abusive. See Geo Grp., Inc., 816 F.3d at 1206 (citing factors relevant to the determination of whether the environment was sufficiently hostile or abusive, including the “frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance” (internal quotation marks omitted)).

4. There is no set number of harassing incidents that results in liability

The court was clear in the case that there is no “magic number of harassing incidents’ that would give rise to liability.”  The totality of the circumstances are taken into account in determining whether a reasonable juror would find the types of hugs and the number of hugs created a hostile environment.  This is why it is so important for employers to continually counsel employees who do not act professionally in the workplace.

5. Alleged supervisory harassment is taken more seriously

The appellate court also held the trial court erred by “completely overlook[ing] legal recognition of the potentially greater impact of harassment from a supervisor and, indeed, the highest ranking officer in the department. The Supreme Court has recognized that ‘acts of supervisors have greater power to alter the environment than acts of co-employees generally.’”  Like it or not, the appellate court looked at the fact that the accused harasser was a supervisor in this case as one of the circumstances it considered in holding that the plaintiff presented enough evidence that a reasonable jury could agree with.

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