The California Court of Appeal has held in a case under the California False Claims Act (FCA) that California’s Rules of Professional Conduct, generally prohibiting an attorney, directly or indirectly, from communicating with a represented party, including the party’s employees, did not apply to prohibit communications between two qui tam plaintiffs and the defendant-employer’s current employees. San Francisco United Sch. Dist. ex. rel. Contreras v. First Student, Inc., No. A134405 (Cal. Ct. App. Feb. 19, 2013). For details on Contreras, please see Plaintiffs Can Communicate with Defendant’s Employees in California False Claims Action, Court Rules.

A positive development for employers. To establish liability in “mixed motive” employment discrimination cases under the California Fair Employment and Housing Act (FEHA), the employee must show that unlawful discrimination was a substantial factor motivating the adverse employment decision, the California Supreme Court ruled. Harris v. City of Santa Monica, No. S181004 (Cal. Feb. 7, 2013). However, if the employer proves that it would have made the same decision absent such discrimination, a court may not award damages, back pay, or order reinstatement. The employee could seek declaratory and injunctive relief, as well as attorney’s fees and costs. For the details, please see California Supreme Court Requires Discrimination as Substantial Motivating Factor in Mixed Motive Cases, Limits Damages Available to Employees.

California employers should be prepared to welcome support dogs and other animals into the workplace as a reasonable accommodation for disabled workers requiring support under new disability regulations issued by the California Fair Employment and Housing Commission. The new regulations significantly expand protections for disabled workers and outline new requirements regarding reasonable accommodations, the interactive process, and proof of discrimination. For information on the key provisions, please see New California Disability Regs Allow Support Animals in Workplace, Mandate Broad Protections for Disabled Workers

 A California court of appeal has recently ruled that an employee is not protected by the Fair Employment and Housing Act (“FEHA”) for refusing to participate in or cooperate with a Company investigation into misconduct. McGrory v. Applied Signal Tech., Inc., (Cal Ct. App. No. H036597, 1/24/2013). In McGrory, California’s Sixth Appellate District rejected an employee’s claim that his employer committed unlawful retaliation by terminating the employee based on the employee’s uncooperative and deceptive behavior during a Company investigation into allegations of sex discrimination. The Court held that giving untruthful information in an investigation or failing to cooperate does not constitute “protected conduct” under the FEHA. Employers are not prohibited under the FEHA from taking action against employees on the basis of such conduct.

The Court reasoned that a company investigation does not meet the definition of a “proceeding” which is protected by the FEHA. Protected proceedings are those which are conducted by California agencies such as the Department of Fair Employment and Housing. The Court relied on analogous federal authority under Title VII to support its decision, as no California state authority addressed the issue. The Court also held that an employer’s honest communication to coworkers about the basis for the termination was not defamatory, as it met the standard for a privileged statement of opinion on a topic of mutual interest.

The Court acknowledged the limitation that uncooperative or deceptive conduct might be protected if it is in opposition to an unlawful practice. Absent such opposition, however, McGrory is a good case for employers dealing with belligerent employee witnesses. Employers are advised to consult with legal counsel to determine whether an employee’s conduct under such circumstances is protected and also to review how such a case would be viewed by the federal National Labor Relations Board under the National Labor Relations Act.

The California Supreme Court has ruled that unions may continue to engage in “peaceful” picketing and other otherwise lawful union activities on an employer’s private property during a labor dispute and that two California anti-injunction statutes regarding labor activities do not run afoul of the First or Fourteenth Amendments of the U.S. Constitution. Ralphs Grocery Co. v. United Food & Commercial Workers Union, Local 8, No. S185544 (Cal. Dec. 27, 2012). The Court’s decision continues California jurisprudence favoring unions as a special interest group with the right to engage in what would be viewed in other states as an unlawful trespass. See our detailed article discussing the cases entitled, “Peaceful Union Picketing Permitted on Private Property, California High Court Rules, Upholds Labor Anti-Injunction Statutes”

There are a number of new California  laws which could impact the workplace. We prepared a chart which lists the major pieces of employment legislation introduced in the California State Senate and Assembly during 2012 that were signed into law by Governor Jerry Brown. All of the bills listed become effective January 1, 2013. Please click here for a list of new laws.

On November 13, 2012, the California Court of Appeal expressly rejected the viability of the “honest belief” defense in Richey v. Autonation, Inc.  In Richey, an employer terminated an employee who was on California Family Rights Act (“CFRA”) leave because, during that leave, the employee was allegedly working at a restaurant he owned.  Shortly thereafter, the employee initiated a lawsuit against the employer setting forth, among other things, claims for violation of CFRA.  After submitting the matter to arbitration, the employer successfully defended itself against the employee’s CFRA claims based upon the “honest belief” defense which states an employer who honestly believes that it is discharging an employee for misusing leave is not liable even if the employer is mistaken.  Objecting to the application of the “honest belief” defense under California law, the employee filed a motion to vacate the arbitration award.  The trial court denied the motion, confirmed the arbitrator’s decision and awarded costs. Plaintiff appealed.

The California Court of Appeal expressly rejected the viability of the “honest belief” defense and found it was contrary to established California law specifying an employer may not terminate an employee taking CFRA leave based solely on the fact the employee is working part time at another comparable job.  In further emphasis, the Court continued, “an employer may not, in terminating an employee who has been granted CFRA leave, defend a lawsuit from that employee based on its honest belief that employee was abusing his leave.”  Rather, the employer must present traditional evidence justifying its termination decision such as the employee’s employment would have otherwise ceased regardless of the CFRA leave.  Thus, the decision in Richey and the significant authority cited in support significantly weakens any discussion of the “honest belief” doctrine with respect to CFRA claims in California.

Our colleague at the Workplace Privacy Blog has reported that the California Attorney General has started to enforce the state’s Online Privacy Protection Act.  Regardless whether a company is located in California, the Act requires any company that maintains a website that collects personal information about Californians to maintain a privacy policy on the site. Please read: California AG Begins Enforcing the State’s Online Privacy Protection Act for Websites, Aps.

 

In a case that could impact employers whose employees use their own vehicles for work, the California Supreme Court granted review to address whether an employer’s insurance policy covered a deadly automobile accident caused by an employee driving his own car. American States Ins. Co. v. Ramirez, No. S205073 (Cal. Oct. 24, 2012). Although this case is still pending, it should remind employers whose employees drive personal vehicles on company business to evaluate with their insurance brokers whether to obtain insurance coverage covering accidents that occur while the employees are working since the employer is likely to be sued. 

 

Employers should also recall that if an employer requires employees to insure their cars for more than the statutory minimum level of insurance, the California Division of Labor Standards Enforcement takes the position that employers must reimburse employees for those expenses under Labor Code Section 2802. We will continue to provide updates regarding the California Supreme Court’s review of the case as appropriate.

 

A new case presents a mixed bag of results for California employers. As a general matter, California employers should be careful when classifying individuals as independent contractors, rather than employees. Reversing the denial of class certification in an action for various Labor Code violations, a California Court of Appeal held that whether newspaper delivery carriers were independent contractors or employees of the newspaper was amenable to class action treatment through common proof. Ayala v. Antelope Valley Newspapers, Inc., No. B235484 (Cal. Ct. App. Oct. 17, 2012). However, the Court affirmed the denial of class certification on the carriers’ claims for unpaid overtime and meal and rest period violations because such claims would require individual factual assessments.

This case provides employers with guidance regarding defending against wage hour class actions. Significantly, the appellate court held certain issues, such as payment of overtime or provision of meal or rest periods, are highly individualized since they depend on how many hours per day and week individuals work. The Court indicated such inquiries may render class certification inappropriate. Where the Court is being asked to examine the nature of a particular job and the employer’s control, the Court noted such issues may lend themselves to class treatment. There are many more issues in this case and employers should also be weary that the case could be appealed by either or both parties.