Employment Law Briefing 2016

Introduction and welcome

Roadmap I.

II.

Paying your workforce A.

Independent contractors

B.

What is compensable time?

C.

Fair pay act

Wage and hour update/class action overview

III. Joint employment IV. National labor relations board developments V.

Protecting your IP in a mobile world

VI. Other key CA legislation

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Paying your workforce

Paying your workforce

1. Independent contractors 2. What is compensable time? 3. Fair Pay Act

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Classification of independent contractors

Independent contractor misclassification

• July 15, 2015 – DOL issued interpretive memorandum on IC misclassification • Employ = “to suffer or permit to work” • Evaluated the “economic realities” test – focus on whether the worker is economically dependent on an employer • This test should be applied in view of FLSA’s broad definition of employer • Is the work integral to employer’s business? • Does worker’s skill affect profit or loss? • Worker’s investment/risk vs. company’s investment/risk? • Does work require special skill or initiative? • Is the working relationship permanent or indefinite? • Nature and degree of employer’s control? Does the worker have meaningful control over his/her “business”? Employment Law Briefing 2016

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Independent contractor misclassification

• EXAMPLE:

A registered nurse who provides skilled nursing care in nursing homes is listed with Beta Nurse Registry in order to be matched with clients. The registry interviewed the nurse prior to her joining the registry, and also required the nurse to undergo a multi-day training presented by Beta. Beta sends the nurse a listing each week with potential clients and requires the nurse to fill out a form with Beta prior to contacting any clients. Beta also requires that the nurse adhere to a certain wage range and the nurse cannot provide care during any weekend hours. The nurse must inform Beta if she is hired by a client and must contact Beta if she will miss scheduled work with any client.

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Independent contractor misclassification

• EXAMPLE: Another registered nurse who provides skilled nursing care in nursing homes is listed with Jones Nurse Registry in order to be matched with clients. The registry sends the nurse a listing each week with potential clients. The nurse is free to call as many or as few potential clients as she wishes and to work for as many or as few as she wishes; the nurse also negotiates her own wage rate and schedule with the client.

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Key independent contractor cases Villalpando v. Exel Direct Inc. (United States District Court, N.D. California – September 3, 2015)  Delivery drivers alleged misclassification as independent contractors  The primary concern was whether the person to whom the service is rendered has the right to control the manner and means of accomplishing the result desired  Facts that supported the employer’s right of control included:  (1) the employer’s right to terminate drivers without cause with 60 days’ notice; (2) both drivers and their trucks must meet the employer’s appearance requirements; (3) the employer engaged in extensive training of its drivers; (4) the drivers’ ability to hire second helpers and operate more than one truck was not inconsistent

 Court found right to control even though employer did not set specific working hours 2015 Mid-Year Employment Law Briefing

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Uber, Lyft, FedEx

• Recent independent contractor cases show this is an issue for both the new and old economies • FedEx paid $228 million to settle an independent contractor misclassification class action. The settlement follows a 2014 Ninth Circuit ruling that drivers were misclassified • Two separate class actions have been brought on behalf of Lyft and Uber drivers, alleging misclassification. Summary judgment was denied in both cases. Numerous related motions are pending • In all these situations, the cases are very fact-specific • The focus is on who controls the means and manner of work

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What is compensable time?

The FLSA and the mobile workforce  DOL plans to issue a Request for Information (RFI) to learn about:  Employee use of electronic devices to perform work outside of regularly scheduled work hours and away from the workplace, and  Last minute scheduling practices that are made possible in large part by employees’ use of these [mobile] devices  The agency plans to issue the RFI in February 2016

 Be careful of de minimis time  Checking emails is often termed de minimis  True de minimis is a few seconds or minutes outside of the workday  Refer to Chicago police case/7th Cir. re overtime for checking email

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What time is compensable varies based on where you sit

 Federal law was clarified by the integrity staffing (Amazon) case  Security screenings were not integral and indispensable to employees’ duties as warehouse workers, and accordingly time spent in lines to leave was not compensable

 But California law is different  LoJack case makes clear that standard is much more employee friendly in California  In California time is compensable if it is subject to the control of the employer – a substantially different standard

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California Fair Pay Act

California Fair Pay Act

 Same pay rates “for substantially similar work”  Composite of equal skill, effort, responsibility under similar working conditions  Not confined to same physical location; viewed across the entire enterprise  Bona fide factors other than sex applied reasonably and account for entire wage difference

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California Fair Pay Act

Except where differences are caused by:  Seniority system  Merit system  System measuring output quantity and quality of work  A bona fide factor other than sex, e.g., education, training or experience

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Provisions of Fair Pay Act  Must maintain records of wages and wage rates, job classifications, and other terms and conditions of employment of all employees for 3 years  Cannot prohibit employees from discussing their own wages or inquiring about another employee’s wages  Cannot retaliate or take any adverse action for exercising rights

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Provisions of Fair Pay Act Damages incentivize lawsuits Potential damages include:  Balance of wages owed  Interest  Liquidated damages of equal amount  Attorneys fees and costs of suit  Fair Pay Act violations can become PAGA claims

 This is likely to be the next major wave of class action litigation

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5 Strategies and best practices

1. Conduct an audit: 

Review all job classifications and identify female-and-maledominated job classifications



Determine whether composite of skill, effort and responsibility is reasonably applied

2. Understand and document reasons for pay disparity: 

Demonstrate bona fide reasons for disparity, e.g., skill, effort, responsibility, working conditions, seniority, merit, quantity or quality of work, more expensive geography, education, training, other legitimate reason not based on gender

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Strategies and best practices

3. Maintain compensation records: 

Reasonably apply composite of skill, effort and responsibility, working conditions and other bona fide factors not based on gender

4. Update EE handbook and policies: 

Do not impose silence policy about compensation



Employees can discuss together or ask about job compensation

5. Train HR, recruiters, managers

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Wage and hour update/ class action overview

Wage and hour in 2015 • The number of new wage-and-hour suits in federal courts hit an all-time high last year, up about 8% over the previous year • According to Federal Judicial Center, 8,781 federal wage-and-hour suits were filed in the federal government’s fiscal year ending Sept. 30, 2015 • Recent growth stems from overtime and minimum wage policy debates around the country, which has increased worker awareness • Monetary value of employment-related class action settlements reached an alltime high in 2015 – top ten settlements in various employment-related categories totaled $2.48 billion over the past year as compared to $1.87 billion in 2014 • More class certifications than ever before

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Source: 12th Annual Workplace Class Action Report, Seyfarth Shaw

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Notable cases from 2015 Verdugo v. Alliantgroup 187 Cal. Rptr. 3d. 613 (Cal. Ct. App. 2015)

 In the past it has been substantially easier for employers to enforce choice of venue provisions rather than choice of law provisions  Here, the court disallowed Texas forum selection clause in an overtime case  Plaintiff’s rights under California law would be substantially diminished if required to pursue her claims in Texas

Ascension Ins. Holdings, LLC v. Underwood  C.A. No. 9897-VCG, 2015 WL 356002 (Del. Ch. 2015)

 Even if forum selection clause holds, court can still choose to apply California law, as the Delaware Chancery Court did here  This was a non-compete case, meaning it has potentially greater impact than Verdugo Employment Law Briefing 2016

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Notable cases from 2015

2015 Mid-Year Employment Law Briefing

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PAGA actions are still complicated Franco v. Arakelian Enterprises 184 Cal. Rptr. 3d 501 (Cal. Ct. App. 2015)

 In light of holdings that don’t allow PAGA actions to be compelled to arbitration, court directed the trial court to do the following:  Compel the wage and hour claims to arbitration  Enforce class action waiver  But keep PAGA action with trial court, stayed pending resolution of the arbitration  So after arbitration concludes, plaintiffs can still get a second bite at the apple by litigating pure PAGA claims

But see Securitas Security Services v. Superior Court 184 Cal. Rptr. 3d. 568 (Cal. Ct. App. 2015)

• Waiver of ability to bring PAGA representative action was not severable from the remainder of the agreement, meaning the entire arbitration agreement was unenforceable Employment Law Briefing 2016

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Some good news on PAGA (until the supreme court took it away) Williams v. Superior Court Williams v. Superior Court, 187 Cal. Rptr. 3d 321, review granted, 191 Cal. Rptr. 3d 497 (2015)

 PAGA has always been the Wild West of employment law – with no clear guidance on the parameters of discovery or identification of who are “aggrieved” parties, costs can increase quickly.  The California Supreme Court on grant of review will decide:  Is the plaintiff in a PAGA action entitled to discovery of the names and contact information of other “aggrieved employees” at the beginning of the proceeding, or is the plaintiff first required to show good cause in order to have access to such information?  In ruling on such a request for employee contact information, should the trial court first determine whether the employees have a protectable privacy interest and, if so, balance that privacy interest against competing or countervailing interests, or is a protectable privacy interest assumed?

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Joint employment

Re-expanding definition of employer

Employers at the top of the pyramid are open to joint employer exposure

Expanded definition of “Employer” Contractor

Subcontractor

Employees

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DOL issues guidance – 1/20/16 Q: Are you a joint employer? DOL: Yes! The DOL has rejected the common law control test for employment and seems to adopt the position that merely doing business with another entity may be sufficient to establish joint employment Two types of joint employment − horizontal and vertical: • Horizontal joint employment – “where two (or more) employers each separately employ an employee and are sufficiently associated with or related to each other with respect to the employee.” • Vertical joint employment – “where the employee has an employment relationship with one employer … and the economic realities show that he or she is economically dependent on, and thus employed by, another entity involved in the work.” Employment Law Briefing 2016

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The EEOC’s joint employer test

The term "joint employer" refers to two or more employers that are unrelated or that are not sufficiently related to qualify as an integrated enterprise, but that each exercise sufficient control of an individual to qualify as his/her employer. The "joint employer" issue frequently arises in cases involving temporary staffing agencies. A charge must be filed against each employer to pursue a claim against that employer

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California gets in on the act – Labor Code 2810.3 “Labor contractor” definition: “An individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business” Exemptions from “labor contractor” definition:  Nonprofits: “A bona fide nonprofit, community-based organization that provides services to workers”  Union hiring halls and apprenticeship programs: “A bona fide labor organization or apprenticeship program or hiring hall operated pursuant to a collective bargaining agreement”  “Motion picture” payroll services companies  If employer has assumed liability: An “employee leasing arrangement [which] contractually obligates the client employer to assume all civil legal responsibility and civil liability under this act”  Other exemptions: Homeowners, employers contracting with delivery services, cable operators, auto clubs contracting with two truck operators

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Key joint employer case

Noe v. Superior Court 187 Cal. Rptr. 3d 836 (Cal. Ct. App. 2015)

 Co- or joint employers can be liable for willful misclassification of employees as an independent contractor when the co-employer knew about the misclassification and failed to remedy it

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NLRB developments for non-union employers

NLRB stays in the spotlight “There’s no such thing as bad publicity.” -P. T. Barnum

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Unfair labor charges

What’s at stake? •

Profitable, efficient operations

•

Monetary remedies

•

Invalidation of critical policies (e.g., confidentiality, arbitration)

•

Customer relations

•

Public image

•

Spinoff litigation and regulatory investigations (meal and rest break class actions, OSHA inspections, building permit interference) Employment Law Briefing 2016

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The NLRB primes the pump

Maybe I should call it the National Labor Relations App?

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Developments

Fundamental shifts (according to the NLRB) in… Who is an employer • New standard for determining a company is a “joint employer”: unexercised and indirect control over terms and conditions of employment can now be sufficient. Browning-Ferris Industries of California, Inc., 362 N.L.R.B. 186 (2015) • Shifts in the definition of who is an “employee” are also on the horizon. For now, at least college football players are not employees. Northwestern Univ., 362 N.L.R.B. 167 (2015) Employment Law Briefing 2016

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Developments

Fundamental shifts (according to the NLRB) in… Who is in charge? • Classic insubordination and misconduct reimagined as “protected” Section 7 activity • Employees gain a presumed right to conduct recorded surveillance at work. Whole Foods Market, Inc., 363 N.L.R.B. 87 (2015) • Employees, if given email access, have a right to use it for engaging in union organizing, griping about management, etc. Purple Communications, Inc., 361 N.L.R.B. 126 (2014) Employment Law Briefing 2016

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Developments

Fundamental shifts (according to the NLRB) in… What is prohibited? • The NLRB continues to invalidate arbitration agreements waiving class actions despite being repeatedly overturned by the US Courts of Appeal • “Blanket” confidentiality impermissible during workplace investigations. American Baptist Homes of the West, 362 N.L.R.B. 139 (2015); Banner Health System, 362 N.L.R.B. 137 (2015). Employment Law Briefing 2016

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Ambush elections Since April 14, 2015, employers have faced unprecedented, lightning-quick elections under new regulations • • • •

Elections can be held in as few as 13 days from the point a petition is filed Strict waiver of arguments not asserted during short briefing timeline (e.g., supervisory status) Election petitions can be signed and filed electronically Employers must produce all employee names, work locations, shifts, job classifications, addresses, cell phone numbers, and personal email addresses on file Employment Law Briefing 2016

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Gear up for 2016 CHECKLIST Develop a plan with counsel for responding to an “ambush election” and accompanying smear campaign Educate front-line managers on NLRB risks and instruct them to keep ears and eyes open Tighten up policies and arbitration agreements to (1) withstand NLRB scrutiny (balanced against business need), and/or (2) win on appeal in the courts Employment Law Briefing 2016

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Protecting your IP in a mobile world

Protecting your assets at the front door: agreements with new employees  Confidentiality and non-disclosure agreements, including limits on information shared on social media  Restrictive covenants (limited utility in CA) − Non-competition and non-solicitation − Activity covenants (restrictions on specific contacts)

 Written acknowledgement of policies regarding use and monitoring of email, computers and mobile devices  BYOD policies are essential

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Confidentiality agreement  In most jurisdictions, continued employment is sufficient consideration  Defines customers, customer contacts, similar compilations as “confidential Information”  Employer owns confidential Information − Labor Code section 2860 − Morlife, Inc. v. Perry, 66 Cal. Rptr. 2d 731 (Cal. Ct. App.

1997)

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Can storing data in the cloud undermine trade secret protections? Under Uniform Trade Secrets Act, trade secrets must be: 1. Maintained in confidence 2. Have commercial value from not being generally known 3. Must not be readily ascertainable by proper means Note: California did NOT adopt the third prong

Risk areas: 1. LinkedIn – Customer lists in the public domain? 2. Sasqua Group, Inc. v. Cartney, No. CV 10-528, 2010 WL 36138855 (EDNY, August 2, 2010) −

Customer information not a trade secret where publicly available information “exceeded the amount and level of detail contained in the Sasqua database”

−

Sasqua did not have password protected computers; did not require employee to sign confidentiality or non-solicitation agreement

3. Law still unsettled as to whether LinkedIn contacts may violate non-solicit and noncompete restrictions; will depend on nature of contact and terms of any restrictive covenants Employment Law Briefing 2016

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The basics for trade secrets  Have agreements you and your employees will understand – and you will enforce  Have a signed agreement for every employee – and know where it is  Have measures that protect your property – and protect other companies’ property  Have onboarding meetings and exit interviews with checklists  Don’t have terms you will not consistently enforce

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Good provisions (b) Former employer information. I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity (c) Third-party information. I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party

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Good provisions 3.

Inventions

(a) Inventions retained and licensed. I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as "Prior Inventions"), which belong to me, which relate to the Company's proposed business, products or research and development, and which arc not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. If in the course of my employment with the Company, I incorporate into a Company Product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine (b) Assignment of inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as "Inventions"), except as provided in Section 3(f) below. I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment and which are protectable by copyright are "works made for hire," as that term is defined in the United States Copyright Act Employment Law Briefing 2016

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Good provisions 4. Conflicting employment. I agree that, during the term of my employment with the Company, I will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of my employment, nor will I engage in any other activities that conflict with my obligations to the Company. 5. Returning company documents. I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors or assigns. In the event of the termination of my employment, I agree to sign and deliver the "Termination Certification" attached hereto as Exhibit C 6. Notification to new employer. In the event that I leave the employ of the Company, I hereby grant consent to the Company to notify my new employer about my rights and obligations under this Agreement.

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Bad provision – anything that will not likely be carried out consistently

CONFLICT OF INTEREST GUIDELINES It is the policy of its subsidiaries, affiliates, successors or assigns (together, the "Company") to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics. Accordingly, all officers, employees and independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with these principles and with the interests of the Company. The following are potentially compromising situations which must be avoided. Any exceptions must be reported to the President and written approval for continuation must be obtained. 1. Revealing confidential information to outsiders or misusing confidential information. Unauthorized divulging of information is a violation of this policy whether or not for personal gain and whether or not harm to the Company is intended. (The Confidential Information and Invention Assignment elaborates on this principle and is a binding agreement.)

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Social media hijacking Protect your social media sites and define whose property is the corporate social media account: 1

2

3

3

Name the account in the company’s name

Describe the company’s business in the account’s profile

Directly link the account with the company’s website and/or its other online accounts

Ensure that their corporate social media accounts are being used solely for business purposes

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Best practices after employment

 Policy regarding remote wiping and monitoring of drives and devices  Exit interview – set expectations  Obtain all passwords  Inventory what was returned  Reminder letter  Cease and desist letter  Evidence preservation demand  Litigation

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Other key legislation

Legislative updates

 January 1, 2016 = $10.00 per hour  Cal. Lab. Code 558.1: Individual liability  AB 622: E-Verify  AB 970: Enforcement of employee claims  AB 1506: PAGA  SB 588: Judgment enforcement

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Leave laws

Overview  Employee leaves of absence and providing employees with additional paid time off  Challenges of complying with California’s Sick Leave Law  Preparing for increased enforcement  Obligation to provide unpaid leave as a reasonable accommodation

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Providing employees with additional paid time off  Trend: extended paid parental/family leave policies  Challenges in administration  How to draft an effective policy  Eligibility: Peg eligibility requirements to date of birth/child’s placement instead of first date of requested leave  Exhaustion of Statutory Entitlements: Require concurrent use of statutory leaves  Coordinate State Benefits: SDIin&Weeks PFL. Leave 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

FMLA 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PDL (assuming difficult pregnancy) SDI Employment Law Briefing 2016

CFRA PFL 59

FMLA/CFRA/PDL compared FMLA

CFRA

PDL

Covered employers

50+ employees on payroll for 20 or more calendar workweeks

50+ employees

5 or more FT or PT employees

Eligible employees

• 12 months of service • 1,250 hours worked during 12 months preceding leave date • Facility with 50+ employees within 75 miles

• 12 months of service All • 1,250 hours worked employees eligible during 12 months preceding leave date • Facility with 50+ employees within 75 miles

Qualifying reasons for leave

• Spouse/child/parent/ employee serious health condition • Birth, adoption or foster placement • Military-related leave

• Spouse/child/parent/ Disabled by pregnancy employee serious health condition • Birth or placement of child

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Challenges of complying with California’s Sick Leave Law  Went into effect July 1, 2015, as amended on July 13, 2015  The basics:  Must allow employee to take at least 24 hours of paid sick leave  Must allow employee to accrue at least 48 hours of paid sick leave  Must be provided to:  All employees, including temporary and part-time employees  Any employee that works 30+ days within a year from the commencement of employment is entitled to paid sick days

 No requirement to payout unused accruals upon separation of employment. If employee is rehired within one year of separation, unused sick leave accruals must be reinstated  Minimum time increment may be set, but it must not be less than two hours Employment Law Briefing 2016

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Paid Sick Leave amendments

July 2015 (or, the joy of unclear clarifications): Rate of pay calculations  Non-exempt employees:  Prior law (90 days rolling average rate of pay)  New alternative (same rate of pay as the “regular rate” for the week; most employers will want to use this)

 Exempt employees:  Allowed: same as calculating pay for other paid leave

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What’s the easiest way to comply?

Q: Do I have to track accrual? A: Not necessarily  Up front Accrual  Pros: No incremental accrual; eliminates half the headache  Cons: Perceived inequity, potential abuse for parttime employees

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What’s the easiest way to comply?

Q: Do I have to track accrual? A: Not necessarily  “Unlimited” vacation has no accrual, seeming to provide a panacea for employers dealing with all these various issues.  But think ahead:  Potential for employee abuse requires strong management  Must craft policies to make sure “unlimited” doesn’t convert PDL, CFRA, or other unpaid leaves into paid entitlements  Unlimited PTO can be an effective tool, but careful planning is required before implementing Employment Law Briefing 2016

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What’s the easiest way to comply?

Q: Do I have to track use? A: Technically, no  New amendments make clear employer does not have to inquire on reason for use of sick leave or PTO

A: Realistically, yes  Maintain evidence of compliance  Mitigate risk of inadvertent adverse action  Interface with other leave laws

We also recommend breaking out PSL from PTO Do not forget about local ordinances Employment Law Briefing 2016

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DFEH PREGNANCY and CFRA TRENDS

Pregnancy Complaints

CFRA Complaints

Year

Complaints

Year

Complaints

 2014

1,181

 2014

3,973

 2013

1,163

 2013

3,789

 2012

886

 2012

1,301

 2011

937

 2011

798

Source: DFEH

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Government is following trend from private litigants FMLA litigation has skyrocketed in recent years New FMLA Cases 2014

1114

2013

987

2012

New FMLA Cases

406 0

200

400

600

800

1000

1200

Source: Annual Statistics of the Administrative Office of the United States Courts

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Changes in landscape for pregnancy discrimination  Supreme Court: Young v. UPS burden-shifting scheme  Women may be able to prove unlawful pregnancy discrimination if the employer accommodated some workers but refused to accommodate pregnant women  Employer policies that are not intended to discriminate on the basis of pregnancy may still violate the Pregnancy Discrimination Act (PDA) if the policy imposes significant burdens on pregnant employees without a sufficiently strong justification  Untested by lower courts  The SCOTUS opinion did not address the ADAAA

 EEOC: Edited pregnancy discrimination guidance in light of Young v. UPS  FEHA: Extensive pregnancy regulations Employment Law Briefing 2016

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Obligation to provide unpaid leave as a reasonable accommodation  Even if employee’s leave is no longer covered by FMLA/CFRA/PDA/PDL, DON’T FORGET THE FEHA and the ADA  FEHA disability and ADA leave covers situations where FMLA/CFRA/PDA/PDL does not apply  Qualified employee with a disability may be entitled to leave as a reasonable accommodation under the ADA unless it would be an undue hardship on an employer  More employers are covered – Assume all California employees are disabled!  Expanded the definition of “disability”  Higgins-Williams v. Sutter Medical Found., 187 Cal. Rptr. 3d. 745 (Cal. Ct. App. 2015): Anxiety/stress working under a particular supervisor is not a disability  Lambert. Nat’l R.R. Passenger Corp., (Cal. Ct. App. 2015): Definition of disability is broad and does not require a specific diagnosis by a doctor; there just must be some medical issues impacting the individual

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But courts are setting some boundaries in disability cases Higgins-Williams v. Sutter Medical Found., 187 Cal. Rptr. 3d. 745 (Cal. Ct. App. 2015)  Plaintiff claimed that anxiety/stress related to a particular supervisor was a disability that must be accommodated  Court disagreed. An inability to work under a particular supervisor because of anxiety or stress related to the supervisor’s standard oversight of job performance is not a disability

Wright v. United Parcel Serv. Inc., 609 F.App’x 918 (9th Cir. 2015)  Vague requirement that lifting 70 lbs was part of the job was not enough for this to be an essential job function  When job functions vary greatly, vague catch-all requirements are insufficient to support a defense to a disability claim

 Remember the importance of job descriptions!

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Obligation to provide unpaid leave as a reasonable accommodation

 An inflexible maximum leave policy can violate the FEHA and the ADA  Engage in the interactive process and provide reasonable accommodation on a case-by-case basis  But remember – Employer has no obligation to provide an indefinite leave

 It is hard to show undue hardship under the FEHA and the ADA when you have an unlimited vacation policy!

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Be prepared for employees out of office  Assess a request for leave under all applicable statutes and provide the greater protections  ADAAA (Assumed Disabled and Always Accommodate)  Engage in the interactive process from day one  Use care asking employees questions  Check in on the employee during the leave – This helps fight abuse too!  Obtain medical certification

 Review and update all policies that impact this  Poster requirements – track the languages you need  Use the right forms and confirm receipt  Keep records separate from personnel file  Train your frontline managers!

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Fair Credit Reporting Act

FCRA is growing area of concern  Often overlooked, the FCRA is a growing area for class action litigation  Worst insult for employers – likely being sued by people who only applied, rather than even worked for you  Makes it even more important to have structure on the frontend of employment process  And don’t forget about interplay of local ban-the-box movement, especially with California and San Francisco standards more restrictive than FCRA

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Fair Credit Reporting Act 15 USC §1681: Employer requirements

Prior to obtaining a report, the employer must:

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Disclose in a standalone written document that a consumer report may be obtained for employment purposes

Get written authorization from the individual and

Certify to the consumer reporting agency that it • notified the individual, • got written permission, • will comply with the adverse action requirements of the FCRA, and • will not use information in the report in violation of any federal or state equal employment opportunity law or regulation

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Recent FCRA settlements In April 2015, Home Depot settled for $1.8 million against roughly 120,000 individuals plus nearly $1 million in attorneys’ fees for allegedly using an authorization form that also released liability for the employer In March 2015, Food Lion settled for nearly $3 million against roughly 60,000 applicants for the alleged failure to provide the disclosure form and receive authorization In October 2014, Publix settled for roughly $6.8 million against over 90,000 applicants for the alleged failure to provide the disclosure agreement under the FCRA

DOLLAR GENERAL

In October 2014, Dollar General settled for $4 million against over 200,000 job applicants for the alleged failure to timely provide an FCRA summary of rights form

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FLSA exception amendments

US DOL overtime proposed regulations for white collar workers  Presidential Memorandum: modernize and simplify the regulations while ensuring that the FLSA's intended overtime protections are fully implemented  DOL Rulemaking: • Double the salary threshold, $23,660, to $47,892 per year (or $921 per week) • Increase salary threshold from $100,000 to $122,148 • Build in future escalators for automatic increases Employment Law Briefing 2016

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Next steps for FLSA overtime regulations?  Nearly 300,000 comments received and DOL “working feverishly to carefully look through the comments”  The final rule to expand overtime pay eligibility is to be issued by spring 2016, per Labor Secretary Thomas Perez in a December 16 interview  DOL estimates that 4.68 million white collar workers now exempt could become newly entitled to minimum wage and overtime protection under the FLSA  DOL estimates 420,000 California employees would be reclassified  Final rule may not be as broad as current proposal, but major changes are in the future for working managers

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Thank you!

Questions

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