The California Court of Appeal for the Second Appellate District upheld the construction industry collective bargaining agreement exemption to the Private Attorneys General Act (PAGA) in Oswald v. Murray Plumbing and Heating Corporation.

Labor Code Section 2699.6

Under Labor Code section 2699.6, construction employees who perform work under a valid collective bargaining agreement (CBA) in effect any time before January 1, 2025, that meets specific requirements, are not covered under PAGA. To be exempted from PAGA, the CBA must expressly provide for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for the employee to receive a regular hourly pay rate of not less than 30 percent more than the state minimum wage rate, and the agreement must do all of the following:

(1) Prohibit all of the violations of this code that would be redressable pursuant to this part and provides for a grievance and binding arbitration procedure to redress those violations;

(2) Expressly waive the requirements of PAGA in unambiguous terms; and

(3) Authorize the arbitrator to award any and all remedies otherwise available under PAGA.

Background

In the underlying case, Murray Plumbing and Heating Corporation (Murray) employed Oswald as a journeyman pipefitter from 2019 to 2020.

In 2020, Oswald sued Murray alleging various wage and hour violations.

Murray and Oswald’s employment relationship was governed by a Master Agreement between Oswald’s union and Murray’s contractor association, effective from 2017 to 2026. The Master Agreement required arbitration of disputes, including PAGA.

The trial court denied Murray’s motion to compel arbitration finding that Labor Code section 2699.6 did not apply.

Decision of the Court of Appeal

The Court of Appeal discussed the public policy in favor of contractual arbitration, but also the rule under Iskanian v. CLS Transportation Los Angeles LLC, against an employee’s right to bring a PAGA action being “unwaivable.”

The Court of Appeal then turned to Section 2699.6, which was a carve-out from PAGA put in place by the Legislature in 2018, which exempts employees in the construction industry from PAGA if their CBA meets the criteria discussed above.

In reviewing the CBA, the Court of Appeal also considered a retroactive Memorandum of Understanding Waiver of PAGA and Class Action Claims (MOU) put in place after the decision of the trial court.

While Oswald argued that the MOU did not apply to him because it was put in place after his employment ended, the Court of Appeal disagreed finding that as a union member Oswald “enjoy[ed] the benefits of the union’s bargaining power but he is also subject to the burdens imposed by the CBA, which limit his remedy….”

The court also reviewed the CBA and found it satisfied the elements of Section 2699.6.

Based on the Court’s review, the trial court’s denial of the motion to compel arbitration was reversed.

If you have questions about the construction industry exemption to PAGA or related issues, please contact a Jackson Lewis attorney to discuss.

On September 5, 2022, California passed Assembly Bill (AB) 257, titled the Fast Food Accountability and Standards Recovery Act, or the “FAST Recovery Act.” AB 257 establishes a Fast Food Council comprised of fast food employees, worker advocates, franchisors, franchisees, and government officials within the Department of Industrial Relations that would set industry-wide standards for wages, working hours, and other working conditions related to the health, and safety of fast food workers. The bill applies to fast food restaurants with 100 or more establishments nationwide.

AB 257, also prohibits fast food employers from discharging or discriminating, or retaliating against an employee for any of the following reasons:

  • The employee made a complaint or disclosed information,or the employer believes the employee disclosed, or may disclose, information to the franchisor, to a person with authority over the employee, or to another employee who has the authority at the fast food restaurant to investigate, discover, or correct the violation or noncompliance, to the media, to the Legislature, or a watchdog or community-based organization, or a governmental agency regarding employee or public health or safety.
  • The employee instituted, caused to be instituted, testified in, or otherwise participated in a proceeding relating to employee or public health or safety, or any council or Local Fast Food Council proceeding.
  • The employee refused to perform work in a fast food restaurant because the employee had reasonable cause to believe that the practices or premises of that fast food restaurant would violate worker orpublic health and safety laws, regulations, any occupational safety and health standard, or any safety order of the division or standards board, or would pose a substantial risk to the health or safety of the employee, other employees, or the public.

Under the law, there is a rebuttable presumption of unlawful discrimination or retaliation if a fast food restaurant operator discharges or takes any other adverse action against an employee within 90 days following the date when the operator had knowledge of any of the employee’s actions above.

Before the end of the California legislative session, AB 257 was amended to remove a proposal to impose liability on franchisors for employment violations by franchisees.

Service Employee International Union president Mary Kay Henry was reported by Bloomberg News to have said, “the bill effectively offers another form of collective bargaining for fast food workers” and referred to the legislation as a “watershed moment.”  The International Franchise Association and other industry groups urged Governor Newsom to veto the legislation to no avail and are urging other states to steer clear of similar initiatives.

AB 257 takes effect on January 1, 2023.

If you have questions about AB 257 or related issues, contact a Jackson Lewis attorney to discuss.

Employers in California are faced with a myriad of complex federal and state laws.  It does not stop there.  An employer with employees working in the City of Oakland may also need to comply with local ordinances.

The following is an overview of employment regulations in Oakland.

Minimum Wage

Like several other cities in California, Oakland has its own citywide minimum wage ordinances. Oakland’s minimum wage is currently $15.06, and increases on January 1, annually based on the Consumer Price Index.

Hotel Workers Protection and Employment Standards

Oakland also has a separate minimum wage for hotel workers working at hotels with 50 or more guest rooms. Currently, the hotel worker minimum wage in Oakland is $16.38 with health benefits or $21.84 per hour without health benefits.

Covered hotel employees must provide employees with a panic button to report an ongoing crime, threat, or another emergency, as well as support after reporting such violent or threatening behavior.

The ordinance also establishes workload restrictions and limitations on mandatory overtime and guarantees employees access to records regarding their pay rate, daily workload, and overtime.

Paid Sick Leave

Oakland also has its own paid sick leave ordinance. Employees who perform at least 2 hours of work in a particular week within Oakland are entitled to accrue paid sick leave.

Covered employees accrue one hour of paid sick leave for every 30 hours they work. Small businesses defined as having less than 10 employees who work for compensation in a given week, may cap paid sick leave hours at 40 hours, and all other employers may cap paid sick leave at 72 hours.

Employers must allow employees to use accrued paid sick leave in their “bank” in the following instances:

  • When an employee is physically or mentally unable to perform his/her duties due to illness, injury, pregnancy, or medical condition;
  • To obtain a professional diagnosis or treatment of his/her medical condition or undergo a physical examination; and
  • To aid or care for a child, parent, legal guardian or ward, sibling, grandparent, grandchild, spouse, registered domestic partner, or a “designated person” who is ill, injured, or receiving medical care, treatment or diagnosis.

A “designated person” is defined as an individual the employee designates to provide care for the employee if the employee does not have a spouse or registered domestic partner.

If you need assistance with compliance with Oakland employment ordinances or related issues, contact a Jackson Lewis attorney to discuss.

At the start of June 2022, the City of Los Angeles approved an ordinance to raise the minimum wage for certain healthcare workers at privately-owned healthcare facilities within the city.

Since June, more cities have passed nearly identical ordinances.

All ordinances apply only to privately owned healthcare facilities including:

  • General acute care hospitals;
  • Acute psychiatric hospitals;
  • Clinics that are part of general acute care hospitals and acute psychiatric hospitals;
  • Skilled nursing facilities that are part of general acute care hospitals and acute psychiatric hospitals;
  • Residential care facilities for the elderly that are located or licensed at the same address or located on the campus of an acute psychiatric hospital; and
  • Chronic dialysis clinics.

Joining Los Angeles in passing the ordinance were the cities of Downey, Long Beach, and Monterey Park.

Based on recent developments, Los Angeles and Downey ordinances are currently stayed due to referendum petitions asking the ordinances to go to the voters instead.

Only Monterey Park and Long Beach have effective dates, August 31st, and September 26th respectively, unless there are last-minute developments.

The cities of Duarte and Inglewood have agreed to put similar ordinances on the ballot in November 2022.

A handful of other cities, including Lynwood, Culver City, and Baldwin Park have considered passing an ordinance but have not acted to date.

There is also a push for a California statewide healthcare minimum wage. However, no formal bill has been proposed and the current legislative session ends on August 31st.

Jackson Lewis will continue to track changes in state and local regulations affecting employers. If you have questions about the healthcare minimum wage ordinances or related issues, contact a Jackson Lewis attorney to discuss.

 

In 2016 California passed legislation that employers who do not sponsor an employee-retirement plan must participate in a state-run retirement program. This program became known as CalSavers.

While there have been legal challenges to CalSavers, the program persists. CalSavers provides an opportunity for employees to defer wages, through payroll deductions by the employer, to a state-run individual retirement savings account program.

An employer is not required to participate in CalSavers if it sponsors or participates in a retirement plan such as a 401(k) plan or pension plan. To be exempt from CalSavers, an employer may sponsor a retirement plan for any of its employees; California employees need not enroll in the retirement plan for the employer to be exempt.

Previously, under the statute “eligible employer” was defined as a person or entity engaged in a business, industry, profession, trade, or another enterprise in the state, excluding specified federal, state, and local governmental entities, with 5 or more employees and that satisfies certain requirements to establish or participate in a payroll deposit retirement savings arrangement.

On August 26, 2022, Governor Newsom signed Senate Bill (SB) 1126, which expands the definition of eligible employer to include a person or entity, as described above, that has at least one eligible employee and that satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement, and would additionally exclude from the definition of “eligible employer” sole proprietorships, self-employed individuals, or other business entities that do not employ any individuals other than the owners of the business.

Also, the bill requires that eligible employers with 5 or more employees that do not offer a retirement savings program, to have a payroll deposit saving arrangement to allow employee participation in the program within 36 months after the board opens the program for enrollment. Moreover, by December 31, 2025, all eligible employers with one or more employees would need to have a payroll deposit savings arrangement, if they do not provide a retirement savings program.

If employers have questions about California’s retirement plan mandate or about employee benefits, contact a Jackson Lewis attorney to discuss.

On June 15, 2022, the U.S. Supreme Court ruled in Viking River Cruises, Inc. v. Moriana that bilateral arbitration agreements governed by the Federal Arbitration Act (FAA) may require arbitration of California Private Attorneys General Act (PAGA) claims on an individual basis only.

In early July, Moriana, the named plaintiff-employee at the center of Viking River Cruises, filed a petition for rehearing with the Court. Moriana argued that the Court’s opinion went beyond the federal question presented and involved the unbriefed issue of state-law contract interpretation and statutory construction that exceeded the Court’s authority.

On August 22, 2022, the high court denied the request for rehearing and issued a final judgment, leaving intact the Court’s analysis of the severability language in Viking River Cruise’s arbitration agreement, as well as the Court’s analysis of statutory standing under PAGA.

While the U.S. Supreme Court’s opinion is now final, the California Supreme Court has granted review in several cases pertaining to employment arbitration agreements and PAGA.  Through these cases, the California Supreme Court may shed additional light on when a plaintiff maintains statutory standing under PAGA.

The enforceability of arbitration agreements in California continues to evolve in other areas as well.  Notably, recently the Ninth Circuit withdrew its opinion pertaining to Assembly Bill (AB) 51 and granted a panel rehearing  of the appeal.  AB 51 is California’s law that purports to prohibit employers in California from requiring employees to sign as a condition of employment or employment-related benefits arbitration agreements concerning disputes arising under the California Fair Employment and Housing Act or California Labor Code. The Ninth Circuit’s move may indicate a likelihood that the Court will conclude the FAA preempts AB 51 in its entirety, potentially giving employers in California the green light to condition employment or employment-related benefits upon an employee’s signing an arbitration agreement.

Jackson Lewis will continue to track cases regarding arbitration agreements and PAGA. If you have questions about employment arbitration agreements in California or related issues, contact a Jackson Lewis attorney to discuss.

Cal/OSHA’s outdoor heat illness prevention standard is well known by employers with employees who commonly work outside. And while there is no official indoor heat illness standard, employers still need to consider heat hazards when evaluating workplace safety, especially in light of Fed/OSHA’s National Emphasis Program (“NEP”) for Outdoor and Indoor Heat-Related Hazards.

Although Cal/OSHA has been working on a proposed standard to cover Heat Illness Prevention in Indoor Places of Employment since 2017, to date the standard has not been approved. Despite no formal standard, Cal/OSHA is stepping up enforcement of indoor heat hazards, presumably due to the NEP, under California’s version of the General Duty Clause: Title 8 Cal. Code Regs., Section 3203.

Section 3203 requires employers to, among other things, identify and evaluate workplace hazards, and correct unsafe or unhealthy conditions based on the severity of the hazards. Employers should document their assessment pursuant to Section 3203.

In assessing indoor heat hazards, employers should consider the following issues:

  • High air temperature
  • High level of humidity
  • Poor air movement
  • Radiant heat sources such as furnaces or machinery

As with other workplace hazards, if heat hazards are identified indoors, employers should consider developing a written plan to protect employees and should include items such as training, personal protective clothing or equipment, engineering controls, administrative measures, and other measures to mitigate potential harm to employees. Although California employers may already have plans in place for employees who work outdoors, a written plan for indoor workers is a good idea, especially with increased enforcement by Cal/OSHA.

If you have questions about indoor heat or related workplace safety issues, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.

The current Cal/OSHA COVID-19 Emergency Temporary Standard (ETS) expires at the end of 2022. But Cal/OSHA is not done with COVID-19 regulations. There is a Non-Emergency Regulation in process. The Standards Board recently published its proposed non-emergency regulation and announced a public hearing for September 15, 2022.

Though the proposal is a non-emergency regulation, the proposed text states the requirements would only remain in effect for two years, except for certain recordkeeping requirements.

Here are other highlights of the proposed regulation:

  • Directs employers to include COVID-19 procedures in their written Injury and Illness Prevention Program (IIPP) or as a separate document.
  • As part of an employer’s COVID-19 procedures, an employer must provide training to employees regarding COVID-19
  • Employers must have effective methods and procedures for responding to COVID-19 cases in the workplace such as exclusion and quarantine requirements.
  • Employers will still have certain notice requirements regarding positive cases in the workplace.
  • Face covering requirements shall still follow California Department of Public Health requirements

One notable omission from the proposed regulation is exclusion pay, which was a very contentious requirement under the ETS.

Jackson Lewis will continue to track developments regarding Cal/OSHA’s non-emergency COVID-19 regulation. If you have questions about COVID-19 workplace safety or related issues contact the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.

A bill to increase pay transparency in California steps closer to becoming law.

Senate Bill 1162, introduced in February and with some amendments since its initial form, passed the Assembly Appropriations Committee on August 11. Only a few steps are left before it could become law this legislative session: (1) a full Assembly vote; (2) reconciliation with the Senate; and (3) the governor’s signature.

SB 1162 continues to focus on enhanced pay transparency. In its current form, the bill requires employers with at least 15 employees to include the position’s pay scale in any job posting, including those posted through a third party. This reflects larger pay transparency trends nationally, including the requirements in Colorado, New York City, and Washington. The California bill also requires employers to provide the pay scale for a position to applicants and employees upon request.

Read the full article on Jackson Lewis’ Pay Requity Advisor Blog.

On June 15, 2022, the U.S. Supreme Court ruled in Viking River Cruises, Inc. v. Moriana that bilateral arbitration agreements governed by the Federal Arbitration Act (FAA) may require arbitration of California Private Attorneys General Act (PAGA) claims on an individual basis only.

However, Justice Sotomayor’s concurring opinion in Viking River Cruises also seemingly included an invitation for California’s legislature and courts to clarify standing issues related to PAGA actions when an employee is required to arbitrate their individual PAGA claims in accordance with an enforceable arbitration agreement.

The California Supreme Court has accepted this invitation and agreed to review several cases on the issue, including Wing v. Chico Healthcare & Wellness Centre (Wing) and Sanchez v. MC Painting (Sanchez).  The specific question presented in these cases is: whether an aggrieved employee who has been compelled to arbitrate claims under PAGA that are premised on Labor Code violations actually sustained by the aggrieved employee maintains statutory standing to pursue PAGA claims arising out of events involving other employees in court or in any other forum the parties agree is suitable.

In Wing, the employee agreed to an alternative dispute resolution policy as a condition of her employment. The policy included a waiver of class or representative actions. The employee then filed a complaint that included PAGA claims. The employer asked for the PAGA claims to be stayed while the individual claims proceeded to arbitration, but the employee refused. The trial court subsequently denied the employer’s motion to compel arbitration of the PAGA claims, and the California Court of Appeal upheld the denial based on California Supreme Court precedent in Iskanian v. CLS Transportation Los Angeles LLC, which held that an employee’s right to pursue a representative PAGA action cannot be waived, and this conclusion was not preempted or foreclosed by the FAA.

In Sanchez, the employee signed an arbitration agreement at the time of hire, which included language that all issues of validity, enforcement, and interpretation of the agreement would be governed by the FAA and that the employee waived the right to bring representative actions. As in Wing, the employer appealed the trial court’s denial of a petition to compel arbitration of a PAGA claim based on the California Supreme Court’s reasoning in Iskanain.

The California Supreme Court has clearly signaled its intention to clarify Iskanian’s status in light of the U.S. Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana. In the meantime, we also await the high court’s decision regarding a potential rehearing in Viking River Cruises.

Jackson Lewis will continue to track cases regarding arbitration agreements and PAGA. If you have questions about employment arbitration agreements in California or related issues, contact a Jackson Lewis attorney to discuss.