Employers’ risk of liability for the misclassification of workers continues to grow, as employee misclassification remains a top enforcement priority for the U.S. Department of Labor (“DOL”), and class actions asserting misclassification claims are filed almost daily in federal and California state courts. Employers regularly using independent contractors should examine those relationships periodically to ensure that the classification remains defensible.
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Amendments to the California Family Rights Act (“CFRA”) regulations, going into effect on July 1, 2015, are meant to clarify a number of uncertainties, align the CFRA regulations more closely with the federal Family and Medical Leave Act (“FMLA”) regulations (where the laws are consistent), and ensure employers and employees have a clear understanding of their rights and duties under the CFRA.

Key provisions of the revised regulations are highlighted below.
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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.
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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).
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Waiting to go through a security screening and then being screened is not compensable time under federal wage-hour law, the U.S. Supreme Court decided in a case issued today (December 9).  But don’t expect California courts to interpret California law in the same way.

In an opinion by Justice Clarence Thomas in Integrity Staffing Solutions, Inc. v. Busk, the Court unanimously ruled that when hourly employees waited for and then went through an antitheft security screen at Amazon.com warehouses, they were engaged in “noncompensable postliminary activities” under the federal Portal-to Portal Act because the screenings “were not the ‘principal activity or activities which [the] employee is employed to perform.’”   The ruling reversed a decision by the Ninth Circuit Court of Appeals.
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A newspaper misclassified its newspaper carriers as independent contractors, the Superior Court for the County of Sacramento has ruled following a trial in a class action for employees’ unpaid mileage expenses under Section 2802 of the California Labor Code. Sawin v. The McClatchy Co., No. 34-2009-00033950 (Cal. Super. Ct. Sept. 22, 2014). Although the newspaper carriers signed agreements stating they were independent contractors, set their own schedules and routes, and could hire their own workers, the Court found the newspaper exercised such significant control over the newspaper carriers’ performance of their duties that it “belie[d] the contrary pronouncement in the form contracts….”

Background

Lorianne Sawin and others worked as newspaper carriers for The McClatchy Company, d/b/a The Sacramento Bee (the “Bee”). The carriers signed agreements with the Bee that stated they were independent contractors. The Bee could terminate the agreement upon 30 days’ notice or at any time for a material breach. The carriers also had the right to terminate the agreement. 
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The Second Appellate District of California recently held that a third party must comply with a subpoena requesting data in a format different than the manner in which the data was maintained where the requesting party offered to pay the reasonable cost of translating the data into the requested form.  In Daniel Vasquez v. California School of Culinary Arts, Inc., the appeal was between plaintiffs in a putative class action, and third party, Sallie Mae, Inc.  Sallie Mae was previously involved in the litigation, but had been dismissed from the action at the time of the subpoena in question.  The case involved a putative class action of culinary students who sought records of their student loans from Sallie Mae.
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A university properly terminated a professor for failing to undergo a fitness-for-duty examination after he had engaged in instances of threatening behavior, the California Court of Appeal has ruled, affirming a judgment in favor of the University of San Francisco on a professor’s alleged disability discrimination claims under the Fair Employment and Housing Act (“FEHA”). Kao v. University of San Francisco, No. A135750 (Cal. Ct. App. Sept. 2, 2014). Significantly, the Court ruled the University was not required to engage in an “interactive process” before requesting the examination because the professor never sought any accommodation for any disability.

Background

John S. Kao was a mathematics professor at the University of San Francisco from 1991 to 2009. Beginning in 2008, Kao engaged in a series of confrontations with co-workers during which he often appeared enraged and threatening. Consequently, his co-workers became concerned for their physical safety. The University investigated, consulting with experts in threat assessment and workplace violence.
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An amendment to the California Farm Labor Contractor Act requires that farm labor contractors participate in at least one hour of sexual harassment prevention training each year. In addition, the amendment requires that an applicant for licensure as a farm labor contractor execute a written statement attesting that the contractor’s members of management have been trained in the prevention of sexual harassment.

The new law, which becomes effective January 1, 2015, also gives the California Labor Commissioner enhanced legal authority to revoke, suspend, or refuse to renew a farm labor contractor’s license if the licensee has been found by a court or an administrative agency to have committed sexual harassment of an employee, or has employed a supervisory employee whom he or she knew or should have known has been found by a court or an administrative agency, within the preceding three years, to have committed sexual harassment of an employee.
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California has become the third state in the country, after New York and Oregon, to ban sexual harassment and discrimination in the workplace directed toward unpaid interns.

The new law (AB 1443) extends workplace harassment and discrimination protections under the California Fair Employment and Housing Act (“FEHA”) to unpaid interns, volunteers, and individuals in apprenticeship training programs. It will go into effect January 1, 2015.
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