I’m moderating a panel discussion on best practices for how to hire and retain good employees at the Western Food Service and Hospitality Expo (WFHE).  The panelists are Joseph Pitruzelli owner of Wurstküche, Francis Drelling General Counsel at Specialty Restaurants Corporation, Naz Moin former director of Human Resources at PizzaRev, and Madelyn Alfano owner of Maria’s Italian Kitchen.  It is on Monday, August 20 at 4 p.m. in the Education Theater (session number S127.  Hope you join us if you are attending the Expo.

In addition, in connection with the California Restaurant Association (CRA), my firm is offering a special an in-person training session that will comply with all the requirements outlined in the regulations regarding California’s Mandatory Sexual Harassment Prevention Training for supervisors (AB 1825) . Supervisors for large employers are required to take this training every two years.  As a bonus, Sexual Harassment Prevention registrants will gain complimentary access to the WFHE show floor, valid day of training (Tuesday, 8/21/18).  The training is at the LA Convention Center, and will take place from 9 to 11:30 a.m. (the show starts at 11 a.m.).  This training is offered to CRA members for FREE and $25 for non-members. Both members and non-members will need to register online here before the day of the training.  Click here for more details about the training and to register.

My firm will have a booth at the show again this year, so if you attend the show, be sure to stop by and say hello.  We are at Booth #1543 (across the aisle from the California Restaurant Association’s booth).  The Expo runs from August 19 to 21 and is at the LA Convention Center.

Also, please stop by our booth and say hi to us if you are attending.  We have some nice swag for readers of the blog!

With the summer coming to an end quickly, and people trying to fit in their vacations during these final weeks, it is a good time to review a few aspects of vacation time under California law. There are numerous rules about how employees earn vacation, and it is often tricky to draft a proper policy without some advice from an experienced California employment attorney. Many out-of-state employers assume that their policy complies with California law when setting up operations, but California is unlike most other states when it comes to vacation time. This Friday’s Five reviews five issues on vacation policies that can create problems for employers operating in California:

1. No use-it-or-lose-it policies permitted.
Under California law, vacation is treated the same as earned wages and vest as the employee performs work. Because vacation is earned proportionally as the employee works, any type of policy requiring employees to lose vacation that has already been earned is illegal under California law.

2. Reasonable caps are allowed.
While employers cannot implement “use-it-or-lose-it” policies, they can place a reasonable cap, or ceiling, on vacation accrual. The DLSE explains:

Unlike “use it or lose it” policies, a vacation policy that places a “cap” or “ceiling” on vacation pay accruals is permissible. Whereas a “use it or lose it” policy results in a forfeiture of accrued vacation pay, a “cap” simply places a limit on the amount of vacation that can accrue; that is, once a certain level or amount of accrued vacation is earned but not taken, no further vacation or vacation pay accrues until the balance falls below the cap. The time periods involved for taking vacation must, of course, be reasonable. If implementation of a “cap” is a subterfuge to deny employees vacation or vacation benefits, the policy will not be recognized by the Labor Commissioner.

3. Vacation is a form of earn wages that must be paid out on the employee’s last day of work.
An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination. See Labor Code Sections 201 and 227.3

4. Deductions are not permitted from employee’s final wages for use of vacation that was not accrued.
Vacation is treated as a form of wages under California law, and by permitting an employee to take vacation time before it is earned, is effectively providing a loan to the employee.  Employers may not utilize self-help remedies to recover debts from the employee’s final pay check, including deducting wages owed to an employee to cover vacation that time was used but had not yet accrued.

5. “Cliff vesting” policies are problematic.
Employers may set probationary periods or waiting periods during which employees do not accrued vacation time. However, the DLSE maintains that employers may not maintain a policy granting employees a lump sum of vacation upon reaching certain dates. The DLSE’s view on this type of “cliff vesting” is that the employer is really attempting to provide for accrued vacation, but at the same time is improperly attempting to limit its liability of having to pay out a pro rata share of the accrued vacation if the employee does not work until the date in which the vacation is granted to the employee. It is safer for employers to avoid these lump sum grants of vacation, and simply set a time period (i.e., the employee’s first six months of employment) that the employee does not accrue vacation.

As you can probably tell by now, California law is vastly different than Federal law and other states. It can be a trap for employers, but with some understanding of the obligations created under the law it can easily be managed.

Hope you are enjoying the final weeks of the summer.

California employers need to routinely need to review their policies and practices to make sure they are complying with intricacies that may arise in their work place.  In law school, attorneys-to-be are taught to “issue spot,” and the unfortunate litigation landscape that faces California employers, business owners and their supervisors must also “issue spot” and make sure the unique aspects of California employment law are being complied with to avoid liability.  This Friday’s Five covers five issues employers should issue spot on a routine basis to help ensure compliance and reduce liability:

1. Reporting time pay

Reporting time pay is triggered when an employee is required to report for work, but is not put to work or is furnished less than half their usual or scheduled day’s work.  If this occurs, the employee needs to be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which cannot not be less than the minimum wage.

It is important for employers to train managers and supervisors about this requirement, so that they understand the need to pay reporting time pay, or report the instance to HR to ensure the employee receives reporting time pay if they are sent home before one-half of their shift is worked.

2. Split shift pay

A split shift is a work schedule that is interrupted by a non-paid, non-working period established by the employer that is other than a meal or rest break.  So if the employee is required to work a shift, but then asked to report to a second shift over later in the same day, the employer may be obligated to pay a split shift premium.  Again, this issue is one that front-line managers and supervisors need to be trained on to ensure that split shifts are being reported to HR or other appropriate management in the company to ensure any split shift pay obligations are being paid.

3. Expense reimbursement issues

Under Labor Code section 2802, employers need to reimburse employees for any business expenses they incur in the course of completing their work for the employer.  This basic concept sounds easy in principle, but given the technology used in today’s workplaces, there can be many areas that expose employers to liability.  For example, if employees are required to work at home, have access to the internet, print reports, or send and receive faxes, the costs for completing this work should be reimbursed by the employer.  Other areas that are often litigated are cell phone reimbursement, mileage reimbursement, and reimbursement for the costs of uniforms and safety equipment.

4. Off-the-clock claims

Employers can be held liable for unpaid wages if they knew or should have known that employees were working and not being paid for the work.  Employers should establish and regularly communicate a time keeping policy to employees and supervisors.  The policy should set forth that employees always have an open door to complain to their supervisors and other managers or human resources about missed meal and rest breaks, unpaid wages, or unpaid wages.  If employees routinely acknowledge that they understand the time keeping policy and are agreeing to record their time through the employer’s system, this can go a long way in defending any off-the-clock claims.

5. On-Call time

Even though employees are traveling to a work site or even sleeping, if the employee is under the control of the employer, the employer may have to pay them for being on-call.  For example, the California Supreme Court held that security guards who were required to reside in a trailer provided by the employer at construction worksites would still need to be paid for the time they slept while on-call.  In that case, during weekdays the guards were on patrol for eight hours, on call for eight hours, and off duty for eight hours.  On weekends, the guards were on patrol for 16 hours and on call for eight hours.  The Court held that the employer was not permitted to exclude the time guards spent sleeping from the compensable hours worked in 24-hour shifts.  See Mendiola v. CPS Security Solutions, Inc.

Likewise, in Morillion v. Royal Packing Co., the California Supreme Court held that, “we conclude the time agricultural employees are required to spend traveling on their employer’s buses is compensable under Wage Order No. 14-80 because they are ‘subject to the control of an employer’ and do not also have to be ‘suffered or permitted to work’ during this travel period.”  Generally, travel time is considered compensable work hours where the employer requires its employees to meet at a designated place and use the employer’s designated transportation to and from the work site.

This week’s Friday’s Five covers five huge misconceptions about California employment law that can land employers into huge legal trouble:

1. Meal and rest breaks seem so trivial.

The topic may seem trivial for companies that have not faced this litigation before, or for out of state employers who wrongly believe California cannot be much different than federal requirements.  However, with the penalty owed to employees of one hour of pay for each missed meal or rest break (i.e., up to two hours of penalty pay per day) these violations add up to significant amounts of liability very quickly.  A verdict against Wal-Mart for $172 million is a good example of the liability that even small employers face in this regard.

2. My payroll company understands the laws about wages and itemized pay statements.

Payroll companies are not law firms and they will not notify you if you are not paying your employees properly, calculating overtime correctly, tracking and reporting paid sick leave appropriately, or even ensure that the paystubs they generate for your employees comply with the law.  It is the employer’s responsibility to ensure the employment laws are being complied with, and it is wise to have an experienced employment lawyer review these practices and audit the practices of the payroll company.

3. The employee’s title determines if they are owed overtime.

An employee’s title is not determinative of whether they qualify as an exempt employee and do not need to receive overtime pay.  See my previous article on the various exemptions that employees may qualify for, and the requirements necessary for employees to meet those exemptions.

4. Employees can be provided “comp time” instead of paid overtime.

While it is true employers may provide employee’s comp time in lieu of overtime, there are many technical restrictions that must be met in order for comp time plans to be legal under California law.  Labor Code section 204.3 only authorizes employers to provide nonexempt employees with compensated time off instead of paying for overtime if the following requirements are met:

  • Payment for comp time must be at the overtime rate of pay (i.e., not less than one and one-half hours for each hour of employment, or double time if applicable)
  • Must be in writing before work begins
  • Employees cannot accrue more than 240 hours of compensation time off
  • Employee has to make a written request for comp time in lieu of overtime
  • Employee must be scheduled to work at least 40 hours a week
  • Employee must be paid at rate of pay in effect at time of payment
  • Payment at termination must be at high of current or three-year average rate of pay
  • Employee must be permitted to use comp time within reasonable period
  • Employer must keep records of comp time accrued and used

5. My company does not need employment counsel to review our polices on a regular basis, we have it under control.

If you have been a reader of this blog for any time period, you understand that every employer in California needs to understand their legal duties when it comes to employing workers.  And with competent employment law counsel [:)] it is not hard to comply with the law, but it is difficult to keep current with the law and ensure all legal obligations are being met.  California employment law is regularly changing.  In addition, employers need to make sure they are complying with intricacies that may arise in their work place, such as:

 

Also, in case you missed it, my Podcast is live:

Youtube: https://www.youtube.com/watch?v=WUbLzjwuUao&t=2s

iTunes: https://itunes.apple.com/us/podcast/zaller-talk/id1405859405?mt=2

Spotify: https://open.spotify.com/show/6zpZovQKMeZ5l2DYL0nh3q?si=KggpsQ6pSIGf1-PCMdM8dw

Have a great weekend.

Douglas Troester filed suit alleging that Starbucks violated the California Labor Code by failing to pay him for short periods of time he spent closing the store.  He alleged that Starbucks failed to pay him for time spent walking out of the store after activating the security alarm, for the time he spent turning the lock on the store’s front door, and for the time he spent occasionally reopening the door so that a co-worker could retrieve a coat.  Based on these allegations, Troester filed a class action under the California Labor Code for failure to pay minimum and overtime wages, failure to provide accurate written wage statements, and failure to timely pay all final wages.  Over the 17-month period of his employment, Troester’s unpaid time totaled approximately 12 hours and 50 minutes. At the then-applicable minimum wage of $8 per hour, this unpaid time added up to $102.67, not including any penalties or other remedies.

In the lower court, Starbucks filed a motion for summary judgment asking the court to dismiss Plaintiff’s case based upon the de minimis doctrine.  The trial court agreed with Starbucks and dismissed the case, assuming that the additional time would be administratively difficult to capture.  However, this ruling was appealed to the California Supreme Court for review based on Plaintiff’s argument that the de minimis doctrine is not applicable under California law.  The Supreme Court’s decision has major ramifications for California employers.  For this week’s Friday’s Five, here are five issues about the Troester v. Starbucks Corp. holding and the de minimis doctrine employers must understand:

1. The de minimis doctrine: What is it?

The trial court, in granting Starbucks motion for summary judgment, explained the de minimis doctrine as follows:

Under this doctrine, alleged working time need not be paid if it is trivially small: “[A] few seconds or minutes of work beyond the scheduled working hours … may be disregarded.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 692, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946), superseded by statute on other grounds as stated in IBP, Inc. v. Alvarez, 546 U.S. 21, 25–26, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005).

The California Supreme Court explained the concept as follows:

The de minimis doctrine is an application of the maxim de minimis non curat lex, which means “[t]he law does not concern itself with trifles.” (Black’s Law Dict. (10th ed. 2014) p. 524.) Federal courts have applied the doctrine in some circumstances to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.

2. What factors do courts look to in determining whether time is de minimis?

The factors some other courts have look to in determining whether time is de minimis include (1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.  The trial court in the Starbucks case noted that numerous courts have concluded that daily periods of about 10 minutes are de minimis.

3. Does the de minimum doctrine apply to California law?

The California Supreme Court held that the de minimis doctrine adopted under the federal Fair Labor Standards Act (FLSA) does not apply to California employers.  However, the Court left open the possibility of some narrower version of the doctrine to apply in wage and hour cases:

In other words, although California has not adopted the federal de minimis doctrine, does some version of the doctrine nonetheless apply to wage and hour claims as a matter of state law? We hold that the relevant wage order and statutes do not permit application of the de minimis rule on the facts given to us by the Ninth Circuit, where the employer required the employee to work “off the clock” several minutes per shift. We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.

…

We decline to decide whether a de minimis principle may ever apply to wage and hour claims given the wide range of scenarios in which this issue arises.

4. Legal and technical advances have limited the need for a de minimis doctrine in California.

The California Supreme Court refused to adopt the FLSA de minimis doctrine for a number of reasons, but specifically stated that the “modern availability of class action lawsuits undermines to some extent the rational behind a de minimis rule with respect to wage and hour actions.”  The Court explained that individual recoveries which are too small to be worth the individual’s or the court’s time can be aggregated to “vindicate an important public policy.”  “In this age of the consumer class action this maxim [de minimis non curat lex] usually has little value.”

Second, the California Supreme Court relied upon the “technical advances that enable employees to track and register their work time via smartphones, tablets, or other devices” that have made it easier to record employee’s time worked as an additional reason not to adopt the federal de minimis doctrine under California law.

Therefore, the Court held, “[a]n employer that requires its employees to work minutes off the clock on a regular basis or as a regular feature of the job may not evade the obligation to compensate the employee for that time by invoking the de minimis doctrine. As the facts here demonstrate, a few extra minutes of work each day can add up.”

5. The Supreme Court recognized some practical steps employers can take to address the “practical administrative difficulty of recording small amounts of time for payroll purposes.”

The Court held that employers are in a better position than employee to “devise alternatives that would permit the tracking of small amount of regularly occurring work time.”  The Court described some alternatives employers could implement include:

  • structuring work so that employees would not have to work before or after clocking out
  • using technology to have time tracking tools to more accurately record employee’s time
  • estimating the time it takes employees to perform work and to compensate employees for that time

The California Supreme Court’s decision, Troester v. Starbucks Corp., No. S234969, 2018 WL 3582702, at *2 (Cal. July 26, 2018) can be read here.  

Employee document storage and retention policies: it is not cutting edge legal theory or management philosophy, but companies that think about and actively develop a plan will save large amounts of money.  The costs savings will come from being able to better defend litigation because the key documents were maintained, and by saving time and effort in searching for and retrieving employment documents when needed.  This Friday’s Five reviews five best practices for document retention for California employers:

1. Define what is kept in a personnel file and communicate this to managers.

Often surprising to many employers, the terms “personnel records” or “personnel file” are not defined under California law and there is considerable ambiguity about what documents should be keep in an employee’s personnel file.

While not legally binding on employers, there is some guidance from the Division of Labor Standards Enforcement (“DLSE”):

Categories of records that are generally considered to be “personnel records” are those that are used or have been used to determine an employee’s qualifications for promotion, additional compensation, or disciplinary action, including termination. The following are some examples of “personnel records” (this list is not all inclusive):

Application for employment

Payroll authorization form

Notices of commendation, warning, discipline, and/or   termination

Notices of layoff, leave of absence, and vacation

Notices of wage attachment or garnishment

Education and training notices and records

Performance appraisals/reviews

Attendance records

Employers need to clearly define what they will keep (or will not keep) in an employee’s personnel file so that all management understands which documents need to be placed in the personnel file of an employee and where to locate documents pertaining to employees.

2. Keep confidential employee medical information separate from personnel file.

State and Federal law requires that employers keep medical information obtained about employees separate from the employee personnel file.  For example, California Regulations require that:

  • Medical information and records obtained as part of the interactive process must be maintained separate from the employee’s personnel file and kept confidential. 2 CCR § 11069(g)
  • Employers must keep information obtained regarding the medical or physical conditions or history of the employee confidential. 2 CCR § 11071(d)(4)

I referenced this issue in a recent video:

3. Time records must be kept long enough and must be in a usable format.

Employers have the burden to record and maintain accurate time records under California law. If the employer knows employees are not properly recording their time, the employer needs to enforce a policy to have employees accurately record their time, even if it requires disciplinary action. Employers need to review their time records to ensure employees are following proper procedures.  Some issues employers need to watch for include:

  • Time records that do not record the employee’s actual time working. For example, the employee records their start and stop time and the same time every day even though the employer knows it changes.
  • Not keeping time records long enough. The statute of limitations can reach back four years in wage and hour class actions, and these records will be the primary issues in most cases. See below for further information.
  • Not recording all required information. For example, employers are required to record employee’s meal periods under the IWC Wage Orders (requirement is found section 7 – Records).
  • Not keeping the time records in a manner that is usable. Maintaining records in a form that makes reviewing the records almost impossible is almost equivalent to not maintaining them in the first place. Some thought should be put into how an employer is keeping old time record information and how that data could efficiently be reviewed in the future if needed.

3. Ensure there is that the institutional knowledge of a company’s document storage and retention policies is maintained.

Is there one person with full knowledge of the employment policies implemented by the company? Institutional knowledge about the various policies put into place by the company, when they were implemented and why they were implemented is critical knowledge. Also, this information should not reside with just one person, but instead there are a few key people who know where this information is retained and how to retrieve it during times of litigation.

5. Develop a checklist for managers to follow regarding records policies.

Employers need to develop of checklist and review the checklist with managers to ensure the requirements are being met.  Some items employers should consider placing on the checklist include:

  • Are employee personnel files maintained confidentially and for at least four years?
  • Is medical information kept separately from the employee’s personnel file?
  • Are employee time records maintained for at least four years?
  • Are employee schedules maintained for at least four years?
  • 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?
  • Are personnel files maintained in a secure location or backup on line?

 

Introducing Zaller Talk – my podcast that covers employment law issues, legal updates, human resources, management issues, and interviews with entrepreneurs and business operators.

Give it a listen on your favorite podcast software or at the links below:

As always, please let me know if you have any topics you would like me to discuss. Enjoy!

The experience of litigation is foreign to a lot of people, and the different stages of litigation can require different strategies and points of reference from the parties.  Mediation is one of the aspects of litigation that can be confusing for parties in a lawsuit, but there are few ground rules to understand about the process that can make it a lot less daunting.  Mediation is a non-binding meeting where the parties in a lawsuit hire an independent third party (a retired judge or lawyer) to try to reach a settlement.  Here are five concepts all parties should understand about the mediation process:

1. The mediator’s role is to make you uncomfortable (but in a good way).

As I wrote in a prior post, a mediator’s only role is to get the case settled.  He or she is not there to be your friend, not to tell you what they feel the case is worth, or to protect your opponent’s position.  Their role is to get a settlement.  Put yourself in the mediator’s shoes, and you have two adversarial parties who hate each other and believe they will win if their case goes to trial.  How, as a mediator, do you get the parties to move off their respective beliefs?  You must attack both sides’ theory of the case by pointing out the weaknesses of each position.

So don’t take the attacks personally, or think that the mediator is only attacking your position.  If the mediator is persuasive about how weak your case is, she is equally persuasive to other side.  Understand also, that the attacks are not personal, it is not about you as a person, but instead about the facts of the case and weaknesses of the case.

2. Understand when being cooperative will help you get a better deal.

A party involved in a mediation must understand that there are two parts to a mediation: (1) the process and (2) the content.  The process is how you interact with the other party being negotiating against.  Are you cordial?  Do you make small talk?  The content is the subject being negotiated, such as the dollar amounts.  A party that is cooperative about the process and competitive about the content will do better overall in a mediation than compared to a party that is competitive on both the process and content.

Think about how you interact with someone that is simply being a jerk to you on ever little issue, even issues that do not impact the subject being negotiated.  When dealing with the hyper-competitive negotiator, your guard goes up and the negotiation turns more personal.  This is a bad combination for attempting to reach a reasonable settlement.

3. If you make a last, best and final offer, make it your last best and final offer.

Parties’ statements made during a mediation must have credibility.  If you make a “last, best and final offer” during a mediation, and the other side rejects the offer, but you continue to negotiate, you have lost credibility with the other party and the mediator.  As a result, even if you continue to negotiate and truly reach your last, best and final offer, the other side (and the mediator) will not believe that is your final number and will continue to push you beyond this number.  There are occasions to make a last, best and final offer, but if you qualify your offer as such, be ready to walk out of the mediation if the offer is rejected.

4. Bracketing.

Ralph Williams, a mediator with ADR Services, explains bracketing as follows:

Negotiation “bracketing” is the process of making a conditional offer linked to an expected response from the other side.  For example, plaintiff states, “I will demand $500,000 if the defendant offers $200,000.”  Defendant responds by accepting the bracket or proposing a different bracket (Defendant will offer $100,000 if plaintiff demands $400,000) or offering an absolute number.  Plaintiff then replies with one of the same three options.  Using negotiation “bracketing,” the parties send clear signals about their expectations, save time and avoid the stress of the negotiating dance that starts with a $1 million demand and a $10,000 offer.

In addition, brackets are conditional offers.  Therefore, unless the other side accepts the proposed bracket, the party making the offer is not committed to those numbers.  This allows parties to potentially make larger moves without the fear of having those moves held against them later in the mediation or in the case.

The use of bracketing during negotiations can add another layer of complexity to the settlement negotiations.  However, with advice from counsel about how to negotiate using brackets, they are an effective tool in resolving cases.  Understanding the concept of bracketing before a mediation – even at a very basic level – will help save time during a mediation and allow you keep your focus on the negotiation.

5. Enter the mediation prepared with a bottom walk-away number, but also a number that represents a goal.

It is important to know what your last best and final number is prior to going into the mediation.  Steve Pearl, a mediator with ADR Services, explains:

Experienced negotiators will set not only the walkaway numbers beyond which they will not move, but also goals that are better than those walkaway numbers. Parties who set “shoot for” numbers as their reference points typically do better than those who only formulate walkaway numbers.

However, just like almost every negotiation “rule” there are drawbacks in setting a walk-away numbers.  Pearl explains that sometimes parties may have to shift their reference points to resolve the case.  So, parties should have clear numbers set going into the mediation, but must also have a mechanism to reevaluate these goals if the case will not settle within these predetermined numbers.

The hot weather facing southern California has also brought a flurry of developments for California employers.  The beginning of July 2018 has been busy, and there is a lot of new developments potentially impacting California employers.  This Friday’s Five focuses on current topics facing California employers this past week:

 1. California’s new data privacy law.

While not directly employment law related, it is important enough to mention.  California enacted a sweeping new law to protect the data privacy of its citizens.  The law requires companies to comply with new regulations regarding how they obtain and share personal information.  Companies must comply with the new law by 2020, and there is a likelihood that the law will be modified prior to its implementation date.  Fast Company has a good overview for some of the impacts of the new law.  The entire bill can be read here.

Employers should continue to watch to see if this law is amended or if other similar laws are proposed that apply to employee information specifically.  As written about previously, biometric data is only regulated by three states, Illinois, Texas, and Washington state, which have laws requiring a notice and voluntary consent before biometric information is collected by private companies.  California’s new law will likely lead to many other states or the federal government to begin to regulate obligations companies have with respect to this information.

2. Parts of California’s new 2018 immigration laws put on hold by Federal District Court.

As previously written about on this blog, employers were put in a precocious position between the federal government’s position on immigration enforcement on one hand, and California’s position on immigration enforcement on the other hand.  Any misstep by employers could expose them to penalties on either side of the equation.  A Federal District Court recognized the difficult position facing employers under both laws, and put a temporary hold on California’s ability to enforce portions of new laws that private employers had to comply with as of January 1, 2018.  The court explained:

This Motion presents unique and novel constitutional issues. The Court must answer the complicated question of where the United States’ enumerated power over immigration ends and California’s reserved police power begins.  The Court must also resolve the issue of whether state sovereignty includes the power to forbid state agents and private citizens from voluntarily complying with a federal program.

The court enjoined California from enforcing Labor Code sections 7285.1 and 7285.2.  Therefore, for now (but subject to change), California employers cannot be prosecuted for consenting to immigration enforcement agents’ access to nonpublic areas or employment records.  The court also enjoined California from enforcing section 1019.2, which prohibited employers from re-verifying the employment eligibility of current employees.  This ruling is very early in the case based on the United States’ motion for preliminary injunction against the State of California.  The court will review the issues and made a final determination later in the case, so employers need to follow any developments.

The opinion in The United States of America v. State of California, can be read here.

3. Juarez v. Wash Depot Holding, Inc. – Holding that arbitration agreement is unenforceable.

This ruling (link to opinion here) is a good reminder to employers who implement arbitration agreements to have the agreements reviewed by counsel on a periodic basis and to ensure that any translations of the document are accurate.  Plaintiffs challenged the enforceability of the arbitration agreement in this case because it prohibited the employee from bringing a claim under California’s Private Attorney General Act (PAGA).  The English version of the arbitration agreement provided that the PAGA waiver was severable from the handbook if it was found to be invalid, but the Spanish version of the arbitration agreement provided that the PAGA waiver was not severable.  Based on these facts, the court held that the arbitration agreement was unenforceable as written.

4. Twitter defeats class certification in gender bias case.

Plaintiff Tina Huang sought to certify a class action lawsuit against Twitter on behalf of 135 women who worked at the company.  In applying the standards set by the U.S. Supreme Court in Wal-Mart Stores, Inc. v. Dukes (2011), the court held that the plaintiff failed “to demonstrate that Twitter’s managers employed a ‘common mode of exercising discretion’ or that Twitter had a ‘uniform employment practice’ that affected the way managers exercised discretion and resulted in disparate impact on women….”  The Dukes case set forth that in a disparate impact case, an employer’s policy of allowing managers discretion over promotion decisions cannot satisfy the commonality requirement for class certification, unless there is a “common mode of exercising discretion” or a “uniform employment practice” that serves as the “glue” for all of the class members’ claims.

5. New national origin regulations and local minimum wage increases took effect on July 1, 2018. 

New California regulations impact employment practices such as English-only policies, height and weight requirements, and documents applicants or employees may be required to provide for employment.  More information can be found here.

Many local cities and counties increased their minimum wage effective July 1, 2018.  More information can be found here.

 

Hope you are staying cool this weekend.

I published this post the last couple of years just before the Fourth.  Hopefully I’ll be able to keep publishing it for many years to come.  Wishing you a great Fourth, and hope you have some time to put aside your work for a bit and enjoy some time with your family.  Happy Fourth!

Five things I’m thankful for this Fourth of July:

1.     For the great risk and sacrifice our Founding Fathers took to establish the country. 

When learning about the Founding Fathers in high school history class I did not have a perspective about the risks the Founders took in establishing the country.  Only now that I have a business, a family, and am relatively successful, can I realize the huge risks the Founders took.  By all means, they were the establishment, the elite of the American society, and if anyone had an interest in preserving the status quo, it was them.  Their sacrifices of life (theirs and their family members) and their fortunes helped build the foundation we benefit from today.

2.     The ability to speak freely and practice or not practice any religion I want.

It is great being able to freely speak your mind and believe in whatever you want.  It is also great be free to practice (or not) any religion you want.  We live in a very tolerant society, and it is even better when the government is not telling you how to live your life.  It is important to remember that throughout history, this has been the exception for how a government normally behaves.

3.     Our Country’s ability to attract creative people.

People that like creating things and being productive want to practice their trade where the government will basically leave them alone and provide a good environment to protect their gains derived from their hard effort (see item #5 below).  The U.S. provides this environment, and that is why so many people come to the U.S. to create a business or to practice their trade.  It is also important to recognize how lucky we are to have been born in the U.S.

4.     My right to practice any profession and access to unlimited resources to learn the required skills.

No one is dictating what students need to be after they graduate high school or college.  Everyone is free to pursue their interest, and the market decides the value of the effort.  With basically any information freely available on the Internet, anyone can learn almost any skill, and like no other time in human history individuals have an almost free method to sell their services or products over the Internet.  In your mid-40’s and want to make a career change?  Perfect, and you don’t even need to go back to school as the information is freely available on the Internet.  Didn’t finish college and are 20 years old with an idea?  Perfect.  Venture capitalists don’t care about your pedigree, they are only interested if you work hard and don’t give up.

5.     Our legal system.

Yes, it sounds trite.  But while I don’t think our legal system is perfect by any means, it is the best system established in the history of mankind.  Everyone living in the U.S. presently is very lucky to have this benefit.  It is a foundation for many of the items I mentioned above.  Because people have a good basis for predicting the outcomes of their actions, such as being able to retain property legally obtained, and knowing if someone breaches a contract there will be repercussions, it creates an environment that attracts hard effort and the best talent from around the world.  This is why the U.S. has been the leader in ideas and new businesses.  However, just because the system is established it does not mean our work is done.  We have to be vigilant not to lose the fairness, reasonableness, and lack of corruption in legal system.

Happy Fourth of July.  I have to go start the grill.