California Supreme Court Clarifies Discovery under PAGA

Emphasizing the broad right of discovery and the remedial nature of the California Private Attorneys General Act of 2004, the California Supreme Court has ruled that, in pretrial discovery, plaintiffs under PAGA has a right to employer records containing other employees’ names and contact information. Williams v. Marshalls of California, LLC, No. S227228 (July 13, 2017).

The trial court adopted, and the Court of Appeal upheld, a limited and phased approach to PAGA discovery. It allowed the plaintiff discovery on the names and contact information of only the other employees in the plaintiff’s same work location. The plaintiff had demanded statewide information. The trial court said that if the plaintiff could establish his claims after his deposition, it would entertain allowing broader discovery as to the defendant’s other stores.

In a 7-0 decision, the Supreme Court, reiterating two themes – the broad right to discovery and the remedial nature of PAGA, and reversed the lower courts’ decisions. It held that the lower courts improperly restricted the plaintiff’s right to “PAGA class” names and contact information on the basis of (1) overbreadth, (2) undue burden, and (3) privacy.

  1. Overbreadth: The Court reiterated that a party ordinarily may use interrogatories to seek the identity and location of witnesses, and it falls on the party resisting discovery to justify its objections. The Court further explained that nothing in PAGA suggests a limited scope or a limitation on discovery. To the contrary, the Court said, PAGA is a representative action that is remedial in nature and broad in scope, which supports broad discovery.
  2. Undue Burden: The Court dismissed this objection on relatively narrow grounds. It held that the defendant failed to provide concrete evidence on how or why this discovery request was unduly burdensome. Rather, the defendant generally argued that a PAGA plaintiff must establish good cause or some merit to his claims in order to justify broader discovery. The Court found no legal basis – whether in PAGA or under general discovery principles – for imposing such a limitation on discovery.
  3. Privacy: The Court rejected the privacy arguments advanced by the defendant and the lower courts. It found that the Belaire notice procedure provided sufficient protection to employee privacy, particularly given the fact that employee contact information does not constitute a “serious invasion of privacy” and that employees would likely want to be contacted about such lawsuits.

Please contact Jackson Lewis with any questions about the Supreme Court decision.

California Issues New Domestic Violence, Sexual Assault, Stalking Notice

As required under AB 2337, California Division of Labor Standards Enforcement (“DLSE”) has published a new written notice to employees, in English and Spanish, regarding their rights to take protected leave for domestic violence, sexual assault, or stalking. AB 2337, signed by Governor Jerry Brown in September 2016, expanded employer notice requirements. Employers must inform each employee of his or her rights through a notice upon hire and at any time upon request. An employer need not use the DLSE’s notice, but any employer’s notice must be “substantially similar in content and clarity” to the agency’s. 

For more on AB 2337, see our blog post, “California Employers Must Provide Written Notice of Right to Take Domestic Violence Leave.” The new notices can be found at the DLSE web page at http://www.dir.ca.gov/dlse/DLSE-Publications.htm

 California employers must update their new hire procedures to include the new notice.

 

San Francisco Passes “Lactation in the Workplace Ordinance”

On June 30, 2017, San Francisco Mayor Ed Lee signed the “Lactation in the Workplace Ordinance” (“Ordinance”), increasing protections for nursing mothers working in San Francisco. The Ordinance becomes effective January 1, 2018, and applies to anyone employed within the “geographic boundaries” of San Francisco.

Read about how this ordinance will impact employers at our Disability, Leave & Health Management blog here.

Are You Ready for Important California and City of Los Angeles Regulations Effective July 1, 2017?

Both California and the City of Los Angeles have enacted regulations effective July 1, 2017 governing employer use of applicant and employee criminal history in making employment decisions. Below we summarize these upcoming changes as well as the City of San Francisco’s ordinance already in effect.

New California Regulations

The California Fair Employment and Housing Council (“FEHC”) adopted new regulations limiting the ability of employers to consider criminal history when making employment decisions. These new regulations prohibit employers from using criminal records or information regarding criminal history in employment decisions if doing so would have an adverse impact on individuals in a legally protected class designated by the Fair Employment and Housing Act (“FEHA”) unless the employer could establish the practice was job-related and consistent with business necessity. Even then, an employer could still face liability if the adversely impacted applicant or employee is able to demonstrate an effective and less discriminatory way of achieving the business necessity.

To establish job-relatedness and business necessity, an employer must demonstrate that the policy or practice is appropriately tailored, taking into account at least the following factors:

(A) The nature and gravity of the offense or conduct;

(B) The time that has passed since the offense or conduct and/or completion of the sentence; and

(C) The nature of the job held or sought.

Demonstrating that a policy or practice of considering conviction history in employment

decisions is appropriately tailored to the job for which it is used as an evaluation factor requires that an employer either:

(A)Demonstrate that any “bright-line” conviction disqualification or consideration (that is, one that does not consider individualized circumstances) can properly distinguish between applicants or employees that do and do not pose an unacceptable level of risk and that the convictions being used to disqualify, or otherwise adversely impact the status of the employee or applicant, have a direct and specific negative bearing on the person’s ability to perform the duties or responsibilities necessarily related to the employment position. Bright-line conviction disqualification or consideration policies or practices that include conviction-related information that is seven or more years old are subject to a rebuttable presumption that they are not sufficiently tailored to meet the job-related and consistent with business necessity affirmative defense (except if justified by subsection (f) below); or

(B) Conduct an individualized assessment of the circumstances and qualifications of the applicants or employees excluded by the conviction screen. An individualized assessment must involve notice to the adversely impacted employees or applicants (before any adverse action is taken) that they have been screened out because of a criminal conviction; a reasonable opportunity for the individuals to demonstrate that the exclusion should not be applied due to their particular circumstances; and consideration by the employer as to whether the additional information provided by the individuals or otherwise obtained by the employer warrants an exception to the exclusion and shows that the policy as applied to the employees or applicants is not job-related and consistent with business necessity.

Regardless of whether an employer utilizes a bright line policy or conducts individualized assessments, before an employer may take an adverse action such as declining to hire, discharging, laying off, or declining to promote an adversely impacted individual based on conviction history, obtained by a source other than the applicant or employee (e.g. through a credit report or internally generated research), the employer must give the impacted individual notice of the disqualifying conviction and a reasonable opportunity to present evidence that the information is factually inaccurate. If the applicant or employee establishes that the record is factually inaccurate, then that record cannot be considered in the employment decision.

For more information about these new regulations, visit our previous blog here.

‘Ban the Box’ Legislation Makes its Way to City of Los Angeles

While the City of Los Angeles Fair Chance Ordinance (“FCIHO”) became effective January 22, 2017, employers had until July 1, 2017, before penalties may be imposed for non-compliance with provisions of the FCIHO. Below we describe the penalties facing employers who fail to comply with the recent ordinance and review the ordinance’s principal requirements.

Except for violations of the FCIHO’s notice, posting, and record retention requirements, the DAA (Department of Public Works, Bureau of Contract Administration) may fine employers who violate the ordinance up to $500 for the first violation, up to $1,000 for the second violation, and up to $2,000 for violations of the FCIHO. Violations of the FCIHO’s notice, posting, and record retention requirements may result in fines of up to $500 per violation.  The amount of the fine imposed by the DAA may be based on the willfulness of the employer as determined by the DAA.

Penalties are due to the City of Los Angeles within 30 days of notice to the employer. Failure of an employer to pay the fine within 30 days shall result in assessment of a late fee, which shall be 10% of the total amount of the fine assessed for each month the amount is unpaid, compounded to include already accrued late fines which remain unpaid.  Further, the fine paid by the employer may be awarded by the City of Los Angeles to the applicant or employee, up to a maximum of $500 per violation.

Individuals also may bring a civil action for violation of the FCIHO once they have submitted an administrative complaint to the DAA (Department of Public Works, Bureau of Contract Administration). Employees or applicants may seek penalties (as set forth above) plus other legal and/or equitable relief as appropriate to remedy the violation.

In sum, absent limited exceptions, the FCIHO generally prohibits private employers with at least 10 employees from inquiring into an applicant’s criminal history until after a conditional offer of employment has been made. This prohibition precludes employers from:

  • Asking any question on a job application about an applicant’s criminal history;
  • Asking about or requiring disclosure of the applicant’s criminal history during a job interview; or
  • Independently searching the internet for criminal conviction information or running a criminal background check before a conditional offer of employment has been made.

If an employer inquires into an applicant’s criminal history after a conditional offer of employment and determines such information warrants an adverse action, the employer must follow the “Fair Chance Process,” which requires the employer to do the following:

  1. Perform a “written assessment” that links the specific aspects of the applicant’s criminal history with the risks inherent in the duties of the position sought.
  2. Provide the applicant with written notification of the proposed action, a copy of the written assessment, and any other information or documentation supporting the employer’s proposed adverse action;
  3. Wait at least five business days after the applicant is informed of the proposed adverse action before taking such action or filling the employment position; and
  4. Consider information or documentation provided by applicant regarding error, rehabilitation or other mitigating information. If the employer still elects to take the adverse action after such reassessment, it must again notify the applicant of the decision and provide the applicant with a copy of the written reassessment.

For more information about the Los Angeles Fair Chance Ordinance, please read our previous posts here and here.

San Francisco’s ‘Ban the Box’ Ordinance

In August 2014, the City and County of San Francisco enacted its Fair Chance Ordinance, which restricts all employers with at least 20 employees from inquiring about an applicant’s criminal history on an employment application or before completing an initial interview. This law applies to regular employees, as well as employees performing contract work, contingent work, or work through a temporary agency.

After the initial interview, the Ordinance continues to prohibit the employer from asking the applicant about the following:

  • Arrests that did not result in conviction, unless charges remain pending;
  • Completion of a diversion program;
  • Sealed or juvenile offenses;
  • Offenses that are more than seven years old from the date of sentencing; and
  • Offenses that are not misdemeanors or felonies, such as infractions.

Prior to requesting any information about criminal history, an employer must provide the applicant with written notice and must display a poster in the workplace developed by the City’s Office of Labor Standards Enforcements (“OLSE”).

The Ordinance also restricts an employer’s ability to consider criminal history disclosed by an applicant. Employers may only consider disclosed criminal history if it “has a direct and specific negative bearing on that person’s ability to perform the duties or responsibilities necessarily related to the employment position.” However, in making this determination, employers must consider whether the position offers an opportunity for the same or similar offense to occur. Employers must also consider the amount of time that has elapsed since the convictions and other mitigating factors.

If an employer chooses to reject an applicant because of their criminal history, the employer is required to notify the applicant in writing before the decision is made. The applicant must then be given seven days to provide notice of an error, rehabilitation, or other mitigating information. If the applicant chooses to submit such information, the employer must take a reasonable amount of time to consider this new information and reconsider the proposed adverse action before taking final action.

The Ordinance also requires employers to include a notice that it will consider for employment qualified applicants with criminal histories in a manner consistent with the requirements of the Ordinance in any solicitation or advertisement for new employees likely to reach persons who are reasonably likely to seek employment in San Francisco.

Employers who violate this Ordinance may be exposed to significant liability. The City is authorized to pursue civil remedies, including injunctive relief, reinstatement of an aggrieved applicant or employee, back pay, benefits, and $50 per day for each day the Ordinance is violated, and attorneys’ fees and costs.

For more information about Ban the Box Legislation in San Francisco, read our previous post here.

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For further information or assistance in developing strategies for complying with these laws, please contact the Jackson Lewis attorney with whom you regularly work.

Assembly Bill 1008 is the Icing on the Cake for Proponents Seeking to Prevent Employers from Considering Criminal Convictions in the Hiring Process

Assembly Bill 1008 is making its way through the California legislature, after being passed in its amended form by the Committee on Appropriations on May 26, 2017. The Bill would repeal Labor Code section 432.9 and make it unlawful for an employer to include on an application for employment any question regarding the applicant’s criminal history or to inquire into an applicant’s criminal history until after the applicant receives a conditional offer.  The justification offered for the bill is that employment of formerly incarcerated individuals is essential to reintegrating them into society and reduces recidivism.

Under the bill, once an employer is able to perform a background check, the employer cannot consider any misdemeanors for which three years have passed since conviction or felonies for which seven years have passed since conviction.

Prior to denying the applicant the position (either in whole or in part) due to the prior conviction, the employer is required to make an “individualized assessment of whether the applicant’s history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” In coming to its conclusion, the employer must consider:

  • The nature and gravity of the offense;
  • How much time has passed since the offense and completion of sentence; and
  • The type of job sought.

After making the assessment, if the employer decides to disqualify the candidate, it must provide notice in writing to the applicant that includes all of the following:

  • The particular conviction at issue
  • A copy of the conviction report obtained
  • Examples of mitigation or rehabilitation evidence that the applicant may demonstrate
  • Notice that the applicant can appeal the decision and the time for such appeal

The applicant must be provided at least 10 days to respond to the decision before it becomes final. The applicant can submit evidence of mitigation or rehabilitation that can be established by any of the following:

  • At least one year has passed since completion of a correctional institute without additional convictions;
  • The applicant has complied with the terms and conditions of parole; or
  • Any other evidence of rehabilitation, such as a letter of recommendation

If, even after the response by the applicant, the employer still decides to deny the applicant the job, the employer must provide all of the following to the applicant in writing:

  • The final decision on denial of employment
  • The procedures for challenging the employer’s decision or requesting reconsideration
  • Whether the applicant is eligible for any other positions with the employer
  • When the applicant is eligible to reapply for the position; and
  • The right to file a complaint with the department.

Assembly Bill 1008 is the icing on the cake for a slew of regulations and proposals in recent years designed to prevent employers from considering an applicant’s prior criminal convictions. Several cities in California recently enacted ordinances and the Department of Fair Employment and Housing recently enacted its own regulations, set to go into effect in July 2017. Employers should be prepared to start following these stringent rules so as to avoid discrimination lawsuits under the proposed law.

Employer’s Enforcement of Its Call-In Policy Was Reasonable Vis-à-Vis a Disabled Employee

Employers frequently struggle with enforcement of call-in and job abandonment policies when there has been a lack of communication by a disabled employee. Click here to read more about a recent ruling related to this matter and find out how it impacts employers at our Disability, Leave & Heath Management Blog.

Class Action Waiver in Employment Arbitration Agreement is Unenforceable, Court Rules

A class action waiver in an arbitration agreement is unenforceable under the National Labor Relations Act, Judge Gonzalo P. Curiel has ruled. Neal Pataky et al. v. The Brigantine, Inc., No. 3:17-cv-00352 (S.D. Cal. May 3, 2017).

Judge Curiel’s decision tracks the Ninth Circuit’s Morris v. Ernst & Young, 834 F.3d 975 (9th Cir. 2016), cert. granted, No. 16-300 (U.S. Jan. 13, 2017), finding that engaging in concerted activity by jointly pursuing legal claims with other employees is a substantive right and distinguishing earlier case law in which a plaintiff had the right to opt out of an agreement but voluntarily chose not to do so. Morris did not extend its holding to class waivers in arbitration agreements that are not required to be signed as a condition of employment. Thus, both Morris and Pataky indicate that agreements with opt-out clauses may still be enforceable.

Significantly, Judge Curiel found the class waiver provision of the agreement was not severable from the arbitration agreement, he stated, “because the parties did not agree to class arbitration, the Court cannot rely on the severability provision in the arbitration agreement to compel Plaintiffs to class arbitration.”

Judge Curiel further denied the defendant’s request for stay pending the U.S. Supreme Court’s review of Morris based on its finding that the defendant did not demonstrate hardship or inequity resulting from proceeding in court and, thus, did not meet its burden in requesting the stay.

Therefore, employers should take care in demonstrating hardship and inequity in any requests for stays pending the Supreme Court’s ruling in Morris.

Employers should have their arbitration agreements reviewed by legal counsel to ensure optimum enforceability following Morris and Pataky. If you have any questions, please consult with the Jackson Lewis attorney with whom you normally work.

California Supreme Court Clarifies “Day of Rest” Provisions

California employers can now schedule employees with more confidence when the press of business requires employees to work beyond their normal work schedule. The California Supreme Court has clarified California’s “day of rest” statute. The ruling affords employers flexibility in scheduling employees and clarifies some of the law’s ambiguities while leaving a few unanswered issues.

This “day of rest” rule is promulgated by Labor Code sections 551 and 552. Section 551 requires “[e]very person employed in any occupation of labor [to be] entitled to one day’s rest therefrom in seven,” while section 552 mandates that “[n]o employer of labor shall cause his/her employees to work more than six days in seven.” There is also an exemption to the requirements “when the total hours of employment do not exceed 30 hours in any week or six hours of any one day thereof” (§556). The California Supreme Court was asked to clarify the meaning of these “day of rest” provision which were at issue in Mendoza v. Nordstrom, Inc.

Supreme Court Answers Ninth Circuit’s Questions

The California Supreme Court was specifically asked to answer three questions by the federal Ninth Circuit:

  1. California Labor Code section 551 provides that “[e]very person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” Is the required day of rest calculated by the workweek, or is it calculated on a rolling basis for any consecutive seven-day period?
  2. California Labor Code section 556 exempts employers from providing such a day of rest “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.” Does that exemption apply when an employee works less than six hours in any one day of the applicable week, or does it apply only when an employee works less than six hours in each day of the week?
  3. California Labor Code section 552 provides that an employer may not “cause his employees to work more than six days in seven.” What does it mean for an employer to “cause” an employee to work more than six days in seven: force, coerce, pressure, schedule, encourage, reward, permit, or something else?

In its ruling, the Supreme Court addressed each of the above questions.

Day Of Rest Is Measured By The Workweek Defined By The Employer. In response to the first question, the Court found that “a day of rest is guaranteed for each work week,” rather than on a 7-day rolling basis. The Court also found that “[p]eriods of more than six consecutive days of work that stretch across more than one work week are not per se prohibited.”  The Court explained that while the Legislature intended to ensure employees had a day of rest in each week, the Legislature did not intend to prevent employees from ever working more than six consecutive calendar days at any one time.

Exception to Day of Rest Requirement Clarified. To answer the second question, the Supreme Court discussed the Labor Code section 556 exemption, which provides, “Sections 551 and 552 shall not apply to any employer or employee when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.” In its discussion, the Court found that the exception to the seventh-day-rest protection only applies to employees who work no more than six hours each day of the given work week.  In so ruling, the Court found that both limits (the weekly limit of 30 hours and the daily limit of six hours) of the statute must be given effect.  The take away for employers is that employees asked to work no more than six hours on any one day, and no more than 30 hours total, may be given a schedule with seven days of work.

Employees May Voluntarily Decide to Work More than Six days in Seven. In response to the third question, the Court addressed the meaning of the term “cause” in Labor Code section 552, which provides that an employer may not “cause his employees to work more than six days in seven.” The Court explained the term “cause” implied a certain “affirmative role in motivating or inducing action.”  Thus, the Court found that an employer’s “obligation is to apprise employees of their entitlement to a day of rest and thereafter maintain absolute neutrality as to the exercise of that right.” Employees who want to voluntarily work more than 6 days in seven should be educated on their rights. We suggest employees document their request to voluntarily work the schedule to their employer.

What Does the Court’s Ruling Mean for Employers?

The Court’s ruling clarified a major point of ambiguity for employers who now may look at a single work week in scheduling a “day of rest” for employees, rather than reviewing previous weeks to determine the rolling period start and end dates. Further, the ruling clarified that employees are allowed to work more than seven days in a row if they are given time off equivalent to one day’s rest in seven days.

The Court’s ruling also provides clarification for employers scheduling employees who work less than full-time. The ruling explained that the day-in-rest exemption only applies to those who never exceed six hours of work on any day of the work week.

However, some ambiguity still remains for when employers “cause” employees to work through their rest day. For instance, the Court’s definition does not address whether employers are allowed to call and ask employees if they can work, or whether this would be considered “causing” an employee to work.  As a result, it is important for employers to properly document when an employee voluntarily wants to work more than 6 days in seven.

Employers should review their work week schedules to ensure they meet the above requirements in appropriately scheduling a “day of rest” for employees. Employers should consider training their management teams or those with scheduling responsibilities about some of the sensitivities in this area. If you have any questions, please consult with the Jackson Lewis attorney you normally work with or please feel free to contact Jonathan Siegel (siegelj@jacksonlewis.com) or Kymiya St. Pierre (Kymiya.St.Pierre@jacksonlewis.com) or call them at (949) 885.1360.

California Employers Should Reevaluate Their Criminal Background Check Policies Before July 1, 2017

The Department of Fair Employment and Housing (“DFEH”) finalized new regulations limiting the ability of employers to consider criminal history when making employment decisions.  The regulations become effective on July 1, 2017.  Employers should reexamine their policies and practices of using criminal histories in employment decisions before the regulations take effect.  The new regulations are focused on limiting potential “adverse impact” on protected groups by employer’s overly broad use of criminal histories in making employment decisions.

The final regulations prohibit employers from using criminal records and information in any employment decisions if:

  1. Such use would have an adverse impact on individuals in a legally protected class designated by the Fair Employment and Housing Act (“FEHA”), or
  2. The applicant or employee is able to demonstrate an effective and less discriminatory way of achieving the specific business necessity.

The employer must first be able to demonstrate that its practice of considering criminal history is both (1) job-related, and (2) consistent with business necessity.  Even if the employer can meet these two prongs, the applicant or employee may still prevail against the employer by demonstrating a less discriminatory policy or practice.

California law already prohibits employers from asking job applicants to provide information regarding marijuana convictions over two years old, detentions or arrests not resulting in conviction, convictions that have been dismissed or sealed, and information related to referrals to a work/education program as part of a term of probation.  These new regulations demonstrate the DFEH’s attempt to regulate more substantive issues in an effort to minimize adverse impact on protected groups.  The final regulations substantially mirror the EEOC Enforcement Guidance adopted in 2012.

For further guidance about the substance of the new regulations, visit our previous blog detailing the proposed regulations here.

Jackson Lewis attorneys are available to help employers navigate these issues.  Should you have any questions about the examining compliance with the new regulations, please feel free to contact Heath Havey at heath.havey@jacksonlewis.com, or the Jackson Lewis attorney with whom you regularly work.

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