A divided panel of judges at the Ninth Circuit held a plaintiff must demonstrate some statistically significant evidence in support of his or her disparate impact claim under the Americans with Disabilities Act and the California Fair Employment and Housing Act, even though such evidence may be very difficult to obtain. Lopez v. Pacific Maritime Assoc., No. 09-55698 (9th Cir. Mar. 2, 2011). 

A former addict alleged her potential employer’s “one-strike” rule discriminated against recovering addicts who seek employment after previously failing its pre-employment drug test.  The employer enforces a “one-strike” rule for all applicants seeking positions as longshore workers under a collective bargaining agreement.  The rule “eliminates from consideration any applicant who tests positive for drug or alcohol use during the pre-employment screening process.”  Applicants receive at least seven days’ advance notice of the tests.  Applicants who fail the screening are disqualified, automatically and permanently, from consideration for future employment with the association’s employers. The Court rejected the former addict’s argument with respect to disparate impact claims because the individual failed to support his contention with anything other than a “bald assertion” that the rule adversely impacted recovering drug addicts.

 

Since federal and California laws strictly regulate drug and alcohol testing policies, employers must consult with legal counsel  prior to promulgating a new policy. Moreover, the division in the panel of three judges who decided the case at the Ninth Circuit suggests this is an issue that could be subject to review by the full Ninth Circuit court, and may ultimately be headed for the U.S. Supreme Court.  For details about the case, please see Ninth Circuit Divided on Applicable Proof for Disparate Impact ADA Claim Brought by Former Addict

The Ninth Circuit rules that an employer has the burden of proving it had a legitimate reason for not reinstating an employee to her former position after taking a leave pursuant to the federal Family and Medical Leave Act (“FMLA”). The Court also found that the employee need not demonstrate her employer lacked a reasonable basis for its refusal.  Sanders v. City of Newport, No. 08-35996 (9th Cir. Mar. 17, 2011).
 
While an employee normally should be reinstated “to her original (or an equivalent) position” within the 12 week leave period under FMLA, the right of reinstatement is not absolute.  The U.S. Department of Labor (“DOL”) regulations provide that     “[i]f the employee is unable to perform an essential function of the position because of a physical or mental condition . . . the employee has no right to restoration to another position under the FMLA.”  29 C.F.R. § 825.214(b). The regulations do not specify which party bears the burden of proof, and the Court had not previously addressed this issue.  In the case, the Ninth Circuit found the burden of proof is on the employer to show it had a legitimate reason to deny reinstatement. 

The Sanders decision illustrates that, while the right to reinstatement from FMLA leave is not absolute, an employer who denies reinstatement to an employee must be prepared to prove the employee had no such right. For more information, please see Employers Must Prove Reasons for Denying Reinstatement after FMLA Leave, Ninth Circuit Rules 

The California Court of Appeals has held that a California employer did not owe overtime to an employee because it had entered into an explicit mutual wage agreement that provided for base compensation and overtime in one lump sum.  Arechiga v. Dolores Press, Inc., No. B218171 (Cal. Ct. App. Feb. 7, 2011).  Carlos Arechiga (“Arechiga”) and Dolores Press, Inc. (“DPI”) agreed that Arechiga would work 11 hours a day, six days a week, for a total of 66 hours per week, consisting of 40 straight-time hours and 26 overtime hours.  DPI paid Arechiga a lump sum of $880.00 a week. Arechiga and DPI later entered into a written employment agreement stating that Arechiga would be paid a “salary/wage of $880.00.”

Arechiga argued that Labor Code Section 515(d) prohibited explicit mutual wage agreements for nonexempt employees based on the California’s Division of Labor Standards Enforcement’s Enforcement Policies and Interpretations Manual.  The Court rejected Arechiga’s argument, noting that the DLSE’s Manual was “non-binding” on the courts because it was not properly adopted under the Administrative Procedures Act.  Further, California case law recognized such agreements for non-exempt employees.  The Court concluded that explicit mutual wage agreements remained valid under California law and that the trial court properly upheld the parties’ agreement.

 The use of explicit mutual wage agreements for non-exempt employees should be entered into carefully and employers should work with counsel to ensure that they comply with applicable law.  For additional information click on California Court Rules Employer Not Required to Pay Overtime under Explicit Mutual Wage Agreement

Governor Brown announced that Julie Su has been appointed as head of the California Division of Labor Standards Enforcement. 

Here is the text of the announcement from the Governor’s website: “Julie Su, 41, of Cerritos, has been appointed Chief of the Division of Labor Standards and Enforcement. Su has worked at the Asian Pacific Legal Center in Los Angeles since 1994, where she currently serves as Director of Litigation. Su has devoted her career to serving the public interest as a civil rights attorney, specializing in representing low-wage workers. Su earned a Bachelor of Arts degree from Stanford University and a Juris Doctor degree from Harvard University. This position requires Senate confirmation, and the compensation is $138,546. Su is a Democrat.” See link to announcement

 What does this mean for California employers and how will it affect, if at all, the California Division of Labor Standards Enforcement’s administrative enforcement position on hot button wage and hour issues? At least one person Jackson Lewis spoken with at the DLSE speculated they would not be surprised if the DLSE’s meal-period enforcement position changed. It will be important to closely monitor the DLSE web site and any upcoming speeches Ms. Su may deliver for any developments. 

 

Jonathan Siegel

Citing the administrative burden placed on the State Labor Commissioner, Governor Schwarzenegger has announced his veto of Assembly Bill 2468. This bill would have permitted an employer to use the designation “Mother-Friendly Worksite” in its promotional materials, if it submitted its workplace breast-feeding policy to the Labor Commissioner and the Labor Commissioner determined the employer’s policy provided for specified criteria. Also, the bill would have required the Labor Commissioner to post a list of “Mother-Friendly” worksites on its website.

The Governor’s veto message succinctly states:

“Existing California law establishes protections for lactating mothers. This bill would do nothing to augment or improve these existing laws pertaining to a lactating mother’s right to express milk in the workplace. Instead, the bill would create additional responsibility for the Labor Commissioner, without any indication that the new requirements are either warranted or necessary.”
 

Inquires from a number of companies and recent headlines about arrests of company executives, celebrities and their companions and the resulting fall out, including job loss, raises an issue that many California employers may not be aware of. The state Labor Code prohibits employers from taking adverse action against applicants and employees for an arrest when the arrest does not lead to a conviction. While employers can ask about pending arrests, the statute (Labor Code Section 432.7) prohibits an employer from using arrest status as a basis for imposing discipline or other terms and conditions of employment. Indeed, some years ago an employee successfully sued his employer, a school district, because it demoted him after receiving notice that he had been arrested.

All is not lost, however. Employers confronted with this situation should investigate the allegations. The statute permits employers to inquire about pending arrests, but not act upon the arrest status. Discipline that is imposed as a result of an investigation or the employee’s failure to cooperate in it should be permissible. In conducting an investigation, be sure to ask the employee what happened and if he committed the crime. You may be surprised – he could confess! The investigation likely should meet the legal standards for establishing a termination for good cause – a good faith belief the employee committed misconduct. The employee should not be faulted if he cannot provide a copy of the police report because it has not been released or if the authorities fail to cooperate in the investigation. Also, remember that the adverse action may need to be job related and consistent with business necessity or it could open the door to a discrimination claim.