HK Partner and workplace violence expert Glen Kraemer recently published an article titled “Decisionpoint” in the Workplace Violence Prevention eReport. The Decision Point article describes difficult real life situations involving workplace violence along with Glen’s advice on how the matters should be handled. A copy of the article can be viewed here: Workplace Violence Prevention eReport – Decisionpoint
In a post-Brinker and Dukes world, employer-friendly wage-hour decisions are becoming more and more common. The decision of the California First District Court of Appeal’s decision in Morgan v. Wet Seal Inc. continues that trend.
In that case, the court upheld a trial court’s decision to deny class certification of three plaintiffs’ claims against their former employer Wet Seal, Inc. The plaintiffs alleged that Wet Seal violated California law by: (1) requiring employees to purchase Wet Seal apparel; and (2) travel between store locations without reimbursing them for mileage.
Why was class certification denied? Because, as courts are now much more likely to find, individual issues predominated over common issues. In this case, the company’s written dress code policy was vaguely written and did not explicitly state employees must purchase Wet Seal clothing. As a result, the court found that individual inquiries were necessary to determine whether the company compelled employees to wear its clothing, what apparel the dress code in fact required, and whether any purchases of Wet Seal clothing were an obligated expenditure. The same was true with the travel expense reimbursement claim, which required numerous individual inquiries because the company’s written policy stated that it did reimburse employees for reasonable expenses.
What’s the take-away from this case? It reflects a positive movement for employers in wage and hour class actions of courts denying class certification due to individual required inquiries. It also reinforces the importance that employers maintain written policies that accurately reflect the law, which will help reduce the likelihood of such lawsuits and help defend against them. And, it is useful to employers in that it clarifies that employers need only reimburse employees for purchasing a product where they require, and not merely encourage, employees to do so.
- Alison Hamer (Los Angeles)
On election night, San Jose, California voters passed a measure increasing the city’s minimum wage from $8.00 to $10.00/hour. The state’s minimum wage is currently $8.00. The wage increase is likely to take effect in March 2013.
California voters in the city of Long Beach passed their own wage measure. Measure N requires nonunionized hotel operators with at least 100 rooms to pay employees an hourly rate of $13.00 or allow them to unionize. The initiative also requires that hotels pay an automatic 2 percent annual raise to employees and provide full-time hotel employees with a minimum of five paid sick days per year. If hotels agree to enter into collective bargaining with employees and unions, then the wage mandates do not apply. Opponents argued that the hotels are being forced to unionize and the wage increase will make it more difficult for Long Beach’s tourism industry to compete with neighboring Los Angeles. Measure N is expected to take effect by the end of the year.
-Kristin Oliveira (San Francisco)
You may have been surprised when, a few months ago, an Administrative Law Judge (ALJ) for the National Labor Relations Board in Phoenix, AZ turned the world of employment law on its head by finding that an unremarkable at-will employment policy in an employee handbook violated the Act. In that case, the ALJ held that the absolute at-will provision constituted a waiver of the Section 7 right to engage in concerted activity to change employees’ at-will employment status, and was therefore unlawful.
On October 31, 2012, the NLRB backtracked. In two different “Advice Memos” (found here and here) the NLRB’s Department of Advice reversed course finding that two at-will policies were consistent with the Act and did not infringe on Section 7 rights. Those memos focused on whether an at-will employment provision in the handbooks of Rocha Transportation, a California Central Valley shipping company, and SWH Corp., which operated an Arizona restuarant, violated Section 7 of the National Labor Relations Act (the “Act”), which provides employees the right to organize and/or engage in other concerted activities. The General Counsel concluded that the language did not violate Section 8(a)(1) of the Act, which prohibits rules or policies that would “reasonably tend to chill employees in the exercise of their Section 7 rights.”
The General Counsel concluded that Rocha’s at-will employment language could not be reasonably construed to restrict Section 7 rights because it did not require employees to “refrain from seeking to change their at-will status or to agree that their at-will status cannot be changed in any way.” The most critical point of the General Counsel’s analysis, however, was that “the provision explicitly permits [Rocha’s] president to enter into written employment agreements that modify the employment at-will relationship….” The General Counsel stated that this provision allowed for collective bargaining to change the at-will employment, which could result in a collective bargaining agreement that is then ratified by the president of the company. While this Memorandum does not carry the same precedential effect as a court or NLRB decision, it does provide a window into the NLRB General Counsel’s thinking on the at-will employment issue. In light of this Memorandum, employers should review their at-will employment policies to ensure that they allow for some senior officer or manager to alter or amend an employee’s at-will employment status.
- Rob Flemer (Los Angeles)
In addition to the new laws relating to religious accommodation and social media (reported in our recent eAlerts), Governor Brown recently signed into law the following bills affecting employers. Unless otherwise noted below, these laws will come into effect on January 1, 2013:
New Laws Affecting All Employers
Itemized Wage Statements (AB 1744)
- Amends Labor Code section 226 to define what is an “injury” for purposes of violating the itemized wage statement statute. Specifically, an employee suffers an injury if either no wage statement is provided or if the employer fails to provide accurate and complete information and the employee cannot promptly and easily determine from the wage statement the following: (1) amount of gross or net wages paid to the employee during the pay period; (2) total hours worked; (3) piece rate units earned and rate; (4) deductions; (5) pay period; (6) hourly rates and corresponding hours worked at each rate; (7) name and address of the employer or legal entity that secured the employer’s services; and (8) name of the employee and only the last four digits of the employee’s social security number or identification number.
- Clarifies that an itemized wage statement “copy,” which employers are required to keep on file for at least 3 years, can include a computer-generated record instead of an actual duplicate copy.
- Beginning July 1, 2013, temporary services employers are required to include the rate of pay and total hours worked for each temporary services assignment. Additionally, effective January 1, 2013, temporary services employers must include in the mandatory Wage Theft Notice provided to new employees the name, physical address of the main office, mailing address (if different from physical address) and phone number of the legal entity for whom the employee will perform work.
Wage Garnishment (AB 1775)
- Increases the amount of wages protected from garnishment. Under existing law, the maximum amount of wages exempt from garnishment was the lesser of 25% of an individual’s weekly disposable earnings or 30 times the federal minimum hourly wage (i.e. 30 x $7.25). Under the new law, the maximum amount of wages exempt from garnishment will be the lesser of 25% of an individual’s weekly disposable earnings or 40 times the California minimum wage (40 x $8.00).
Warehouse Contractors And Sufficient Funds (AB 1855)
- Adds warehouse contractors to a list of labor services contractors (construction, farm labor, garment, janitorial, security guard) with whom companies are prohibited from entering into contracts where the company knows or should know that the contract does not provide sufficient funds to allow the contactor to comply with state and federal wage and hour laws.
Compensation Agreements (AB 2103)
- Overturns existing appellate case law by specifying that payment of a fixed salary to a nonexempt employee provides compensation only for the employee’s regular, non-overtime hours, notwithstanding any “explicit mutual wage agreement” or other private agreement to the contrary.
Breastfeeding (AB 2386)
- Amends the Fair Employment and Housing Act to provide that the term “sex” includes breastfeeding or medical conditions related to breastfeeding.
Inspection And Copying Of Employee Personnel Records (AB 2674)
- Requires employers to make current or former employees’ personnel records available for inspection or provide a copy if the employee requests within 30 calendar days of the employer’s receipt of the employee’s written request. The request must be in writing but may be on an employer-provided form. The employer may designate the person to whom a request must be made. The parties may agree in writing to a date longer than 30 days but not to exceed 35 days from the employer’s receipt of the request. The employer may redact the names of any nonsupervisory employees contained in the records prior to inspection or copying.
- The employer must make the records available for inspection or copying to current employees at the place where the employee reports to work or another mutually agreed upon location.
- The employer must make the records available for inspection or copying to former employees where the employer stores the records, unless mutually agreed upon in writing.
- The employee may receive a copy by mail if he or she reimburses the employer for postal expenses. If the employee was terminated for violation of law or an employment-related policy involving harassment or workplace violence, the employer may make the records available at a location a reasonable driving distance from the former employee’s residence or may mail the records.
- Employers are only required to comply with one request for inspection or copying per year by a former employee. An employee representative cannot request more than 50 records (i.e. of 50 different employees) per calendar month.
- Employers are required to retain personnel files for three years after the employee’s termination of employment.
- These provisions do not apply to an employee covered by a valid collective bargaining agreement that provides for a procedure for copying and inspection of personnel records.
Exempting Certain Payments From Written Agreement Requirement (AB 2675)
- Legislation passed last year mandates that effective January 1, 2013, employment contracts involving commissions as a method of payment must (1) be in writing; (2) set forth the method by which the commissions are required to be computed and paid; and (3) contain a singed receipt for the contract from each employee. AB 2675 clarifies that the term “commissions” does not include short-term productivity bonuses, temporary variable incentive payments that increase but do not decrease payment under the written contract, or bonus and profit-sharing plans, unless the employer has offered to pay a fixed percentage of sales or profits as compensation for work to be performed.
Prevailing Wages (AB 2677)
- Increased employer payment contributions that result in a lower hourly straight time or overtime wage is not a violation of the applicable prevailing wage determination as long as certain specified conditions are met.
New Laws Affecting Public Sector Employers
Paid Leaves Of Absences For Unelected Members (AB 1203)
- Requires a school district or a community college district to provide a paid leave of absence to a classified employee who is an unelected member of a school district public employee organization or community college district public employee organization for activities the member is authorized by the organization to attend and would require the employee organization to reimburse the school district or community college district on behalf of an unelected member who receives a paid leave of absence. It also requires an employee organization to provide reasonable notification to the employer requesting a leave of absence without loss of compensation for any of the above-described activities.
On September 30, 2012, Governor Brown vetoed bills that: (1) governed the working conditions of domestic employees; (2) prohibited an employer from refusing to hire an individual who was unemployed; and (3) governed the working conditions of agricultural workers. Those bills may resurface in the future.
In light of these upcoming changes to the law, employers should focus on the following highlights:
- Ensure that their itemized wage statements comply with the new requirements of Labor Code section 226;
- Ensure that as of January 1, 2013, that garnishment of employees’ wages comports with California’s new wage garnishment law and be aware that they may receive garnishment orders in 2013 that are out of date;
- Familiarize themselves with the new rules and deadlines regarding inspection and copying of current and former employees’ personnel files;
- Ensure that compliant commission agreements are executed by employees by January 1, 2013; and
- Update all handbooks and employment policies regarding breastfeeding, religious dress and grooming and social media protection.
- Amy Durgan (San Francisco)
On September 8, 2012, Governor Jerry Brown signed the Workplace Religious Freedom Act of 2012 into law. It amended the California Fair Employment and Housing Act to specifically state that religious clothing and hairstyles (grooming) qualify as a protected religious beliefs or observances and that segregating an employee from customers or the public is not a reasonable accommodation of an employee’s religious beliefs. Really? We needed a new legislation to tell us that?
The law also clarifies that FEHA’s “undue hardship” definition applies to FEHA’s religious discrimination provisions. When evaluating failure to accommodate allegations, California courts have applied the federal court’s “de minimis” definition to FEHA’s religious discrimination section instead of using FEHA’s “significant difficulty or expense” definition. See Soldinger v. Northwest Airlines, Inc., 51 Cal. App. 4th 345 (1996). You probably already thought the federal definition was hard enough to meet.
Why did they pass this? The legislation came about in recognition of the 9.5 percent increase in 2011 in religious discrimination cases documented by the EEOC.
AB 1964 was sponsored by Assemblymember Mariko Yamada’s (D-Davis), who is running for re-election this year, and the Sikh Coalition and supported by AFSCME, AFL-CIO, Agudath Israel of California, ACLU of California, American Jewish Committee, Anti-Defamation League, California Employment Lawyers Association, California Immigrant Policy Center, California Nurses Association, Church State Council, Consumer Attorneys of California, Council on American-Islamic Relations – California Chapter, Hindu-American Foundation, Japanese American Citizens League, North American Religious Liberty Association – West.
- Kirstin Muller (Los Angeles)