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.

Refusing Employee’s Attempt to Rescind Resignation Was Not Actionable

In what appears to be an issue previously undecided under the California Fair Employment and Housing Act (“FEHA”), the Second District Court of Appeals in California held that an employer’s refusal to allow an at-will employee to rescind her resignation is not a proper basis for a disability discrimination lawsuit. The employee alleged that when she resigned, she was suffering from an altered mental state due to a side effect of a medication she was taking.  The employee sued for disability discrimination when she was not permitted to rescind her resignation.  See, Ruth Featherstone v. Southern California Permanente Medical Group, decided April 19, 2017.

The employee took approved medical leave to have surgery for a chronic sinus condition. After recovering from surgery, the employee’s doctor released her to work without restrictions. Seven days after returning to work, the employee called her supervisor to resign effective immediately.  The supervisor did not consider the employee’s behavior (talking quickly and stating that “God had told [her] to do something else”) during that call as odd or inconsistent with the employee’s character.  After the conversation, the supervisor emailed the employee to confirm her resignation in writing and, at the instruction of human resources, immediately processed the termination paperwork so that the employee could receive her final paycheck.

The day after she resigned, the employee was hospitalized because of uncharacteristic behavioral changes. A coworker found out about the employee’s hospitalization and reported it to HR who properly declined to discuss the situation since the coworker was not a family member.  Three days later, the same day that the employee was released from the hospital, the employee confirmed her resignation in writing.

Five days after confirming her resignation in writing, the employee told HR that at the time of her resignation she was suffering from an adverse drug reaction and wanted to rescind her resignation. The employer allowed the employee to provide any documents she wanted to be considered in connection with her request to rescind her resignation.   After considering the submitted documents and consulting legal counsel, HR determined that nothing improper had occurred in accepting the resignation and that no facts required the employer to allow the employee to rescind her resignation.

The appellate court upheld the trial court’s order granting summary judgment for the employer because: (1) when the employee resigned, the employer did not know she was suffering from an altered mental state; (2) the employee’s resignation was voluntary because the employer did not coerce or pressure her to resign; and (3) the employee was at-will, so there was no employment contract that required the employer to let her rescind her resignation.

This decision should be welcome news to employers when faced with inconsistent employment status communications from employees. Please feel to contact Sander van der Heide (Sander.vdHeide@jacksonlewis.com) or Cary Palmer (palmerc@jacksonlewis.com), or the Jackson Lewis attorney with whom you regularly work, if you have any questions about this decision.

Both the City of San Diego and the State of California “Clarify” Their Sick Leave FAQs

Both the City of San Diego and the California Department of Labor Standards Enforcement have updated their “Frequently Asked Questions” related to the respective local and state sick leave requirements. Click here to read the full article about these specific changes at our Disability, Leave & Health Management blog.

Is Your Piece Rate Plan Up To Date?

A piece rate exists where an employee is paid a fixed amount for each unit produced or action performed. Industries that commonly use piece rates include agriculture, automobile repair, trucking, manufacturing, and call centers.

A new law went into effect this year requiring employers to provide additional pay for rest periods and recovery periods to employees who are compensated on a piece rate basis, even if the employees also are paid minimum wage.   A recovery period is a cool-down period provided to an employee to avoid heat illness.

Employees who are not paid a minimum wage in addition to the piece rate, also must be paid separately for “nonproductive time.” Nonproductive time is time under the employer’s control, excluding rest and recovery periods, that is not directly related to the activity being compensated on a piece rate basis.

The rate of pay for rest and recovery periods generally is determined by taking the employee’s total compensation received per workweek (excluding any minimum wage paid for rest/recovery periods and excluding overtime pay), and dividing it by the total hours worked during the workweek. Examples of how to calculate pay for rest and recovery periods are listed on the California Division of Labor Standards website here.

Piece rates are not commissions. Commissions involve sales work and typically are earned as a percentage of the sales price or percentage of a profit made from a sale.  Commissions involve earnings in proportion to the amount of the sale, while piece rates, if related to sales, involve a fixed amount no matter how large or small the sale.

If you would like to discuss how your piece rate plan is affected by the new requirements, please contact your Jackson Lewis attorney.

New Regulations Further Limit Use of Criminal History for Employment Decisions

Effective July 1, 2017, new regulations will further limit employers’ ability to consider criminal history when making employment decisions.

On March 27, 2017, the Office of Administrative Law approved the Fair Employment Housing Counsel’s new regulations clarifying existing limitations on criminal background checks and, in large part, conforming to the Equal Employment Commission’s position that criminal background checks on applicants may have an adverse impact on protected classes.

Potential Disparate Impact

The new regulations, which largely track the Equal Employment Opportunity Commission’s (“EEOC”) April 2012 Enforcement Guidance, require employers to demonstrate that any criminal history information sought is job-related and consistent with a business necessity. An applicant or employee challenging an employer’s criminal background check has the initial burden to show the employer’s policy or practice of considering criminal history has a disparate impact upon a protected class (e.g., race, national origin, and so on).

If the applicant or employee demonstrates a disparate impact, the burden shifts to the employer to establish that the policy nonetheless is justifiable because it is job-related and consistent with business necessity. The employer also must demonstrate that the policy or practice is tailored to the specific circumstances, taking into account: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense or conduct and/or completion of the sentence; and (3) the nature of the job held or sought.

Where an employer adopts a bright-line policy or practice automatically disqualifying all applicants with certain types of past convictions, the new regulations impose a rebuttable presumption that the policy or practice is not sufficiently tailored to the specific circumstances of the job.

The new regulations recognize that certain jobs, like those that have particular licensing requirements, and certain employers, by state or federal law, are prohibited from employing people with certain criminal records. Compliance with state or federal criminal history screening requirements is a viable defense for employers.

Takeaway

Employers using criminal background checks should review carefully their policies and practices to ensure they are in compliance with these new regulations as well as applicable local ordinances (such as Ban the Box ordinances enacted in Los Angeles and San Francisco).

Please contact a Jackson Lewis attorney for assistance with this and other workplace laws.

Court May Make Reasonable Inferences about Employee’s Exempt, Non-Exempt Activities

A trier of fact can make reasonable inferences about employees’ duties to determine status for overtime pay under California labor law, the California Court of Appeal has ruled, affirming the trial court’s holding. Batze v. Safeway, Inc.,  No. B258732 (Cal. Ct. App. Apr. 4, 2017).

A group of assistant store managers claimed they should have been classified as non-exempt managers entitled to overtime pay. The assistant managers testified that they were required to engage in non-exempt duties such as stocking shelves and building product displays. At trial, the court found that because more than 50 percent of the assistant managers’ time was spent performing managerial tasks, they were exempt from overtime pay.

The assistant managers appealed the ruling, contending gaps in the evidence should have precluded the trial court from finding exempt status. They argued that they did different jobs at different times and there were differences at stores affecting the time spent on various job duties. They also argued that the trial court must determine exempt status on a workweek-by-workweek basis, without drawing inferences from the employees’ activities during other workweeks to fill in those gaps.

The Court of Appeal affirmed the trial court’s ruling. It acknowledged that the relevant period for determining employees’ exempt status was indeed the workweek, but this does not mean the trier of fact cannot make reasonable inferences from the employees’ activities in earlier and later periods, as the trial court did in this case, especially when there is no evidence to suggest the employees’ duties varied significantly between store to store or week to week.

Please contact a Jackson Lewis attorney with any questions about this decision and other workplace developments.

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