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California Workplace Law Blog

Jackson Lewis to Sponsor 12th Annual Valentine Run/Walk Benefiting Legal Services of Northern California

The firm’s Sacramento office is sponsoring the Legal Services of Northern California’s 12th Annual Valentine Run/Walk to take place in Sacramento on February 14, 2015.

The event helps LSNC to continue its 57 year mission to help empower the poor and secure access to basic needs. Through special programs and advocacy, Legal Services of Northern California supports over 500,000 under-represented citizens in 23 counties in Northern California, helping the poor achieve justice and stability by challenging the causes and effects of poverty in our communities. Continue Reading

Employer Could Not Establish Sufficient Evidence to Prove Employee Signed an Arbitration Agreement through an Electronic Signature

A new case from the California Court of Appeal, Fourth Appellate District, Division Two, Ruiz v. Moss Bros. Auto Group, Inc., was certified for publication on December 23, 2014, and addresses an area of interest for many employers – electronic signatures on arbitration agreements. Employers must build safeguards into such systems  to be able to prove the employee electronically signed the document. To view the Court’s opinion, click here.

In the Ruiz case, an employer filed a petition to compel arbitration of the employment-related claims.  The trial court denied the petition on the ground that the employer failed to meet its burden of proving the parties had an agreement to arbitrate the controversy. The employer could not establish to the court’s satisfaction that the employee signed the agreement.  (Code Civ. Proc., § 1281.2.)   Continue Reading

California Supreme Court Decision Barring Waiver of Representative Claims is Left Intact by U.S. Supreme Court

The U.S. Supreme Court has declined to review the California Supreme Court’s decision that representative claims under the California Labor Code Private Attorneys General Act (“PAGA”) cannot be waived in employment arbitration agreements. Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (Cal. 2014), cert. denied, No. 14-341 (U.S. Jan. 20, 2015).

In Iskanian, the California Supreme Court ruled the Federal Arbitration Act (“FAA”) preempted California law disfavoring enforcement of a class action waiver in employment arbitration agreements. However, it also ruled the FAA did not preempt representative actions under PAGA. For additional information on Iskanian, please see our article, California High Court: Class Action Waivers in Arbitration Valid, But Waivers of Representative Actions under State Law Are Not. Continue Reading

California Paid Sick Leave: What You Need to Know for 2015

This article is originally published on Inside Counsel. View the original here.

California has joined a growing number of jurisdictions mandating employers to provide paid sick leave to their employees, including part-time and temporary workers. Below is a summary of the California law’s key points:

Effective dates

There are two dates to keep in mind: January 1 and July 1.

The employer’s obligation to provide paid sick leave under the law does not take effect until July 1, 2015.

However, on Jan. 1, 2015, covered employers are required to:

  • Post in a conspicuous place at the workplace a poster containing various requirements under the law. A compliant poster is available on the California’s Division of Labor Standards & Enforcement (“DLSE”) website.
  • Issue newly hired nonexempt employees an updated “Notice to Employee” (required under California Labor Code section 2810.5) that includes paid sick leave information. A revised “Notice to Employee” form is available on the DLSE’s website. The law is not clear as to whether current nonexempt employees must be reissued a new “Notice to Employee” after January 1, or if the poster will suffice. Continue Reading

California High Court Rules Sleep Time is Compensable Hours Worked

Holding that “hours worked” under California Labor Code and Industrial Welfare Commission (“IWC”) Wage Order No. 4-2001 (“Wage Order 4”) include all time spent at the employer’s workplace and under the employer’s control, such as sleep time, the California Supreme Court has ruled that security guards were entitled to compensation for all on-call time, including sleep time. Mendiola v. CPS Security Solutions, Inc. et al., No. S212704 (Cal. Jan. 8, 2015). Significantly, the Court refused to incorporate into Wage Order 4 the federal regulation allowing exclusion of sleep time from hours worked and disapproved prior California case law applying the federal regulation to employees working 24-hour shifts.

Background

CPS Security Solutions, Inc. provides security services at construction sites, including trailer guards who spend the night at the assigned jobsite in residential trailers. Trailer guards investigate alarms and other suspicious circumstances and their presence helps to prevent vandalism and theft. Tim Mendiola worked as a trailer guard for CPS.

Upon hiring, Mendiola signed an on-call agreement outlining his hours of work. The agreement designated eight hours per day, generally from 9:00 p.m. to 5:00 a.m., as on-call hours. On weekends, trailer guards worked 24-hour shifts; 16 hours of active patrol from 5:00 a.m. to 9:00 p.m. and eight hours of on-call time from 9:00 p.m. to 5:00 a.m. CPS compensated the trailer guards only for on-call time spent actually responding to alarms and investigations. However, if a trailer guard spent at least three hours engaged in investigations during the on-call period, the guard would be paid for the entire eight hours.

The agreement also provided that, if a trailer guard wanted to leave the jobsite, the guard needed to notify a dispatcher, provide information regarding his or her whereabouts, carry a pager or cell phone and respond to any calls from CPS, and stay within a 30-minute radius of the site. Trailer guards could engage in personal activities while on call in the trailers; however, children, pets, and alcohol were not permitted, and adult visitors were permitted only if authorized by CPS’s clients.

Mendiola, on behalf of himself and other employees, sued CPS for alleged unpaid wages and overtime, claiming that CPS’s on-call policy violated Wage Order 4. The trial court issued a preliminary injunction ordering CPS to pay the trailer guards for all on-call time, and CPS appealed. The Court of Appeal affirmed the trial court with respect to the weekday on-call time, but reversed with respect to the weekend on-call time, ruling that the weekend on-call time constituted non-compensable sleep time. Both parties appealed to the California Supreme Court granted review.

Applicable Law

Wage Order 4 requires that employers “pay to each employee . . . not less than the applicable minimum wage for all hours worked in the payroll period.” “Hours worked” is defined as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”

Whether on-call time constitutes hours worked depends on the level of the employer’s control over its employees. Gomez v. Lincare, Inc., 173 Cal. App. 4th 508 (Cal. Ct. App. 2009). In assessing an employer’s control, courts examine several factors, including whether there was an on-premises living requirement, the nature of any geographical restrictions on the employee’s movements, the frequency of calls and required response time, the ability of the employee to trade on-call duties, pager or cellular phone use, and whether the employee engaged in personal activities.

Wage Order 4 does not provide any exclusion for sleep time from hours worked. Wage Orders 5 (covering residential care workers) and 9 (covering ambulance drivers) provide specific sleep-time exclusions. Under the federal Fair Labor Standards Act (“FLSA”) regulations, where an employee is required to be on duty for at least 24 hours, an employer and employee may agree to exclude “a bona fide regularly scheduled sleeping period of not more than 8 hours from hour worked, provided adequate sleeping facilities are furnished by the employer and the employee can usually enjoy an uninterrupted night’s sleep.”

In Monzon v. Schaefer Ambulance Service, Inc., 224 Cal. App. 3d 16 (Cal. Ct. App. 1990), the California Court of Appeal ruled that ambulance drivers were not entitled to compensation for sleeping periods under Wage Order 9 and the federal sleep-time regulation. In Seymore v. Metson Marine, Inc., 194 Cal. App. 4th 361, 381 (Cal. Ct. App. 2011), the Court of Appeal, extending Monzon, ruled that ship crew members were not entitled to compensation for sleep time under the federal sleep-time regulation, which it found applicable to all employees who work 24-hour shifts.

Time Compensable

CPS argued that the trailer guards’ on-call hours were not compensable because they were free to engage in personal activities during that time, unless actively engaged in an investigation. The employer urged the Supreme Court to incorporate into Wage Order 4 the federal sleep-time regulation excluding from hours worked the guards’ sleep time.

Addressing the issue of on-call time, the Supreme Court concluded the trailer guards’ on-call time was compensable hours worked because CPS exercised significant control over its employee’s activities. The guards were required to live onsite as a condition of employment, were expected to respond promptly to alarms in uniform, and were limited in their ability to leave the premises. Guards could not easily trade on-call responsibilities, and CPS restricted nonemployee visitors, pets, and alcohol use. Although the guards could engage in some personal activities, such as showering, eating, reading, and watching television, the Court found significant the “guards’ mere presence was integral to CPS’s business.” Thus, the Court held that all on-call time constituted compensable hours worked.

Turning to sleep time, the Court ruled that agreements to exclude sleep time from compensable hours worked are permitted only where specifically authorized by California law. The Court refused to incorporate into Wage Order 4 the federal sleep-time regulation. In so ruling, the Court noted, “Federal regulations provide a level of employee protection that a state may not derogate. Nevertheless, California is free to offer greater protection.” The Court cautioned California courts against adopting federal standards in the absence of “convincing evidence” that the IWC intended to do so.

Wage Order 4 does not include a specific exclusion for sleep time, but the IWC included sleep time exclusions in Wage Orders 5 and 9, the Court noted. This demonstrated that “the IWC knew how to explicitly incorporate federal law and regulations when it wished to do so,” the Court said. The absence of similar language in Wage Order 4 “seriously undermine[d] the notion that the IWC” intended to incorporate the federal sleep time regulation.

Further, the Court disapproved Seymore’s application of the federal sleep-time regulation to all employees who work 24-hour shifts and limited Monzon to its facts, which involved ambulance drivers.

Accordingly, the Court concluded that CPS could not exclude the guards’ sleep time from compensable hours worked under Wage Order 4.

***

California employers whose employees work 24-hour shifts should review their payroll practices to ensure compliance with the Wage Orders applicable to their industry. Employers also should consider auditing their policies and actual practices regarding on-call time, paying close attention to any restrictions placed on on-call employees’ activities, so that employees are paid correctly for all hours worked.

Jackson Lewis attorneys are available to answer inquiries regarding the California Supreme Court’s decision and assist employers in auditing their workplace policies and practices.


© 2015 Jackson Lewis P.C. This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis.

This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome.

Jackson Lewis P.C. represents management exclusively in workplace law and related litigation. Our attorneys are available to assist employers in their compliance efforts and to represent employers in matters before state and federal courts and administrative agencies. For more information, please contact the attorney(s) listed or the Jackson Lewis attorney with whom you regularly work.

Upcoming Seminar: Immigration at Work: How Executive Action and Immigration Reform Affects Employers

More than 11 million people live in the United States without legal immigration status. That represents potentially over 6% of our workforce. The immigration debate is no longer about whether the immigration system is broken, but how to fix it. As the President’s executive action is being implemented and Congress’s immigration reform measures are being developed, employers are stuck with many questions and few answers. As a management side employment law firm, Jackson Lewis is focused on how these changes affect the work place. This invitation-only session has been designed for advanced HR professionals and in-house counsel and will focus on implementation of best practices to address immigration compliance in the face of these unprecedented changes. Topics covered include:

  • Overview of executive action and immigration reform
  • The ICEMan cometh: the current state of immigration enforcement
  • The immigration compliance roadmap: how to review an I-9 in 60 seconds; what to do about e-verify; and best practices for immigration compliance.
Date: 1/15/15 8:30AM - 10:30AM
Location: Law Offices of Jackson Lewis P.C., 50 California Street, 9th Floor, San Francisco, CA 94111
CEU Credit: 0.00
CLE Credit: Pending
HRCI Credit: Pending
Price: $20.00
Questions? Contact SFRSVP@JacksonLewis.com.

Federal Arbitration Act Preempts State Arbitration Rule, California Court of Appeal Holds

The Federal Arbitration Act (“FAA”) preempts California’s Broughton-Cruz rule, which states arbitration agreements for injunctive relief claims under the state unfair competition and false advertising laws are against public policy and invalid, the California Court of Appeal has held in an insurance consumer class action, allowing arbitration to proceed. McGill v. Citibank, N.A., No. G049838 (Cal. Ct. App. Dec. 18, 2014).

This decision calls into question the continued viability of California’s Broughton-Cruz rule, which was established by the California Supreme Court in Broughton v. Cigna Healthplans, 21 Cal. 4th 1066 (Cal. 1999), and Cruz v. PacifiCare Health Systems, Inc., 30 Cal. 4th 303 (Cal. 2003). Continue Reading

Governor Brown Appoints New Leaders to the California Department of Fair Employment and Housing

On December 29, 2014, Governor Edmond G. Brown announced the appointments of Kevin Kish as the new Director and Joan Keegan as the new Chief Deputy Director for the Department of Fair Employment and Housing (DFEH).  To view the original press release, click here.

Kish, 38, a Yale Law School grad and adjunct professor of law at Loyola Law School, has an active background in advocating for workers’ rights.  Kish has been the director of the Employment Rights Project at Bet Tzedek Legal Services since 2008.  Kish has taken a special interest in attempting to limit retaliation experienced by low-wage workers who file claims against their employers. Continue Reading

Los Angeles Minimum Wage Increase for Hotel Workers May Have Far Reaching Implications

On December 16, 2014, the American Hotel & Lodging Association and the Asian American Hotel Owners Association filed suit in federal court seeking to enjoin the City of Los Angeles from implementing the new Hotel Workers Act, which would put in place one of the nation’s highest minimum wages, targeted specifically to hotel workers in the largest hotels. The Act raises the hourly minimum wage for large-hotel workers in Los Angeles to $15.37. Hotels with more than 300 rooms would need to comply beginning July 2015, while hotels with at least 150 rooms will have another year to comply. Continue Reading