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2011 Employment Law Update
New Poster Requirements:
There are new 2011 versions of the following required federal posters: "Federal Minimum Wage," "Equal Employment Opportunity is the Law," and "Safety and Health Protection on the Job."
There are also new 2011 versions of the following California required posters: "California Minimum Wage," "Your Rights Under USERRA (Veterans Benefits)," and "Notice Employee Polygraph Protection Act" posters.
In addition to the above, in 2011, employers using Managed Professional Networks (MPNs) to provide treatment for workers' compensation claims must post information informing employees about the MPNs being used. Any pamphlet distributed by the employer regarding workers' compensation must also include information regarding the employer's MPNs.
California
- Amendment to California's FAIR EMPLOYMENT AND HOUSING ACT (AB 1814): California Government Code § 12940 has been modified at subdivision (a)(5)(B) to specify that an employer is not liable for age discrimination if the employer alters, reduces, or eliminates health benefits or health care reimbursement plans to retired persons when the retirees become eligible for Medicare benefits at age 65.
- Certain Union Employees Exempt from MEAL PERIOD REQUIREMENTS (AB 569): California Labor Code § 512 has been amended to exempt from meal period requirements employees in construction occupations, commercial drivers, employees in the security services industry employed as security officers, and employees of electrical and gas corporations or local publicly owned electrical utilities, but only if (a) the employee is covered by a valid collective bargaining agreement; and (b) the agreement expressly provides for the wages, hours of work, and working conditions of the employee, including meal periods, premium wage rates for all overtime hours worked, and a regular rate of pay not less than 30% more than the state minimum wage rate.
- EXPEDITED JURY TRIALS ACT (AB 2284): This act creates procedures for expedited jury trials in civil cases where the parties stipulate in writing to the new procedures.�
- Trials have eight instead of 12 jurors, with no alternates.
- A vote of six jurors is required for a verdict.
- Peremptory challenges are limited to three (instead of six).
- Each side must present its case in three hours.
- Parties waive their rights to an appeal or to move for a directed verdict.
- Parties agree that the expedited jury trial is binding, subject to any written high/low agreement (a written agreement may be entered into by the parties that specifies a minimum amount of damages that a plaintiff is guaranteed to receive from the defendant, and a maximum amount of damages that the defendant will be liable for, regardless of the ultimate verdict returned by the jury.)
- UNEMPLOYMENT INSURANCE ELIGIBILITY FOR DOMESTIC VIOLENCE VICTIMS (AB 2364): Prior California law allowed employees to retain their eligibility for unemployment if they left employment to protect their children from domestic violence abuse. The new law specifies that employees retain their eligibility for unemployment if they left employment to protect their family from domestic violence abuse.
- PAID LEAVE ENTITLEMENT FOR ORGAN AND BONE MARROW DONATIONS (SB 1304): California Labor Code §§ 1508-1513 extends a benefit previously only held by State employees to private employees as follows:�
- Private employers with 15 or more employees must provide up to 30 days of paid leave per year for an organ donation to another person in any one-year period and up to five days of paid leave per year for a bone marrow donation to another person in any one-year period.
- Such leave is not considered a break in service.
- Such leave shall not be taken concurrently with FMLA or CFRA leaves.
- Employers may require an employee to take up to five days of accrued sick or vacation leave for bone marrow donations and up to two weeks of accrued sick or vacation leave for organ donations, unless prohibited by a collective bargaining agreement.
- Employers must restore the employee to the same or an equivalent position upon the employee's return to work.
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Martinez v. Combs (2010) 49 Cal.4th 35. The California Supreme Court clarified the definition of "employer" under California Labor Code § 1194 to be that set forth in the IWC's wage orders, not the common law, as follows:�
- Party who exercises control over the wages, hours or working conditions; or
- Party who suffers or permits work; or
- Party who "engages" under the common law definition.
- Key test: whether a party has the power to prevent an employee from working by being involved in hiring, firing, or setting and/or paying wages.
- The Court disapproved the "down-stream" benefit theory, which set forth that a party should be found to be an employer if it knew of a person's employment and benefited from it.
- Reid v. Google, Inc. (2010) 50 Cal.4th 512. The Supreme Court rejected the "stray remarks" doctrine's "categorical exclusion of evidence" and determined that the ageist remarks could be considered to determine if the stated reasons for termination were pretextual. The stray marks themselves may not suffice as proof that discrimination occurred, but may be probative of discriminatory animus when considered with other evidence.
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Pineda v. Bank of America, N.A. (2010) 50 Cal.4th 1389:
- California Labor Code § 203 provides, in pertinent part, that "if an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced …" for up to thirty days.
- Plaintiff was belatedly paid his final wages before filing suit and filed to recover only the penalties for the late payment.
- Two lower courts held that plaintiff's actions were barred by a one-year statute of limitations. The California Supreme Court disagreed. It held that a different statute of limitations does not apply when an employee seeks to recover only Labor Code § 203 penalties. Section 203, subdivision (b), contains a single, three-year limitations period governing all actions for § 203 penalties irrespective of whether an employee's claim for penalties is accompanied by a claim for final wages.
- Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665. If an arbitrator makes an error of law which prevents an employee from obtaining a hearing on the merits, the arbitrator has exceeded his/her powers within the meaning of Code of Civil Procedure § 1286.2, subdivision (a)(4), and a court may set the arbitration aside.
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Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592.�
- Although Labor Code § 351 provides that tips are the "sole property" of the employees who receive them, it does not create a private cause of action for employees who believe their tips have been misappropriated by their employer. Only the Department of Industrial Relations may enforce Labor Code § 351's provisions.
- Although section 351 does not create a private right of action, an employee may have other remedies if gratuities are misappropriated, such as a common law action for conversion.
- The Court declined to rule on whether tip pooling arrangements are permissible under section 351.
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Bright v. 99¢ Only Stores (2010) 189 Cal. App. 4th 1472.
- Penalties under the Private Attorneys General Act ("PAGA") are available for violations of Section 14 of the California Industrial Welfare Commission Wage Order 7-2001, which requires employers to provide employees with "suitable seats when the nature of the work reasonably permits the use of seats."
- Any penalties awarded under PAGA are split between the aggrieved employees (who get 25%) and the California Labor and Workforce Development Agency (who gets 75%). Employees can also recover their attorneys' fees.
- Although the appellate court agreed with the lower court that the Wage Order did not provide a penalty applicable to seating violations on its face, it ruled that violations of Wage Order 7 also amount to violations of Labor Code § 1198, which makes it unlawful to employ workers under conditions of labor prohibited by a wage order, such as failure to provide seating. Because section 1198 does not specify a civil penalty, PAGA both supplies a civil penalty and allows aggrieved employees to sue to recover it.
Federal
- FORM I-9: The United States Department of Labor has issued a final ruling on electronic signatures and storage of Forms I-9.
- Employers may complete, sign, scan and store Forms I-9 electronically.
- The Form I-9 must be completed by the third business day after an employee has started work.
- Employers may store forms either in paper form, electronically, or through a combination of both.
- Employers may, but are not required to, provide Form I-9 transaction conformations if requested by an employee.
- The EEOC issued regulations on how the GENETIC INFORMATION NONDISCRIMINATION ACT ("GINA") is going to be administered.�
- "Genetic information" is defined as any information about (1) an individual's genetic tests; (2) the genetic tests of the individual's family members; and (3) the manifestation of a disease or disorder in a family member.
- There is no definition for a "genetic test." Guidance is given by way of example. The following are NOT considered to be genetic tests: complete blood counts, newborn screening tests, amniocentesis, cholesterol tests, liver-function tests, or tests for the presence of alcohol or illegal drugs.
- It is illegal for employers to receive protected information, unless such receipt is "inadvertent." An employer's receipt of protected information will not be considered "inadvertent" unless the employer has affirmatively directed the employee not to provide genetic information when responding to an otherwise lawful request for medical information. Therefore, all FMLA and CFRA forms MUST be updated to direct an employee not to provide genetic information.
- NEW FEDERAL WHISTLEBLOWER PROTECTIONS: Dodd-Frank Wall Street Reform and Consumer Protection Act ("DFA") (H.R. 4173). The DFA creates new whistleblower protections and expands existing protections for employees in the financial services industry. The DFA:
- Prohibits retaliation against individuals who provide information to the SEC, initiate or participate in SEC administrative actions, or make disclosures required by or protected by laws and rules under the SEC's jurisdiction.
- Includes an incentive program to encourage reporting of SEC violations.
- Creates a civil cause of action in Federal Courts, with a six-year statute of limitations.
- Limits use of mandatory pre-dispute arbitration agreements/releases of whistleblower claims.
- Lewis v. City of Chicago (2010) 560 U.S. ____, 130 S.Ct. 2191 (2010). The statute of limitations for filing a disparate impact charge of discrimination with the EEOC over an allegedly discriminatory employment practice restarts each time the employer engages in that practice.
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City of Ontario v. Quon, 560 U.S. ____, 130 S.Ct. 2619 (2010). The United States Supreme Court held that the City of Ontario did not violate an employee's privacy rights by reading his non-work hour text messages, because the search was justified, the search method was reasonably related to the search's objectives, and the methods were not excessively intrusive.
- The Court declined to determine whether an employee has a reasonable expectation of privacy in personal text messages sent from an employer-issued pager.
- The Court decided to assume that Quon had a reasonable expectation of privacy in the text messages and then determined that the subsequent search which led to the discovery of the text messages was reasonable under the Fourth Amendment, because "[t]he judiciary risks error by elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear."�
- Hertz Corp. v. Friend, 560 U.S. ____, 130 S. Ct. 1181 (2010): The United States Supreme Court adopted the "nerve center" test for corporate citizenship, helping to clarify when multi-state companies may remove lawsuits to Federal court. The "nerve center" is "the place where a corporation's high level officers direct, control and coordinate the corporation's activities, … which will typically be found at its corporate headquarters."
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Rutti v. Lojack Corp., 596 F.3d 1046 (9th Cir. 2010): On March 2, 2010, the Ninth Circuit issued a revised opinion which superseded and changed the holding in its August 21, 2009 decision. The issue decided was whether commute time is compensable under California law, Labor Code § 510. The court concluded that, although commute time is generally not compensable under Labor Code § 510, it may be compensable where employees are so restricted in their activities to be considered under the control of the employer. Factors the court considered were:
- Whether the employee may take passengers in the vehicle during his or her commute time;
- Whether the employee may stop for personal errands or is required to drive only to and from his or her home and the worksite;
- Whether the employee may use his or her cell phone during the commute except to take calls from the employer; and
- Whether the employer dictates the employee's first assignment of the day and the order in which the employee is to complete the day's jobs.
- EEOC v. Prospect Airport Servs., 621 F.3d 991 (9th Cir. 2010): Title VII protects both genders from being sexually harassed at work.
- Mayo Foundation for Medical Education and Research v. United States (Docket No. US 09-837 January 11, 2011). Medical residents are full-time employees not exempt from payroll taxes.
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Dawson v. Entek International, Docket No. 09-35844 (9th Cir. 2011). Plaintiff Shane Dawson is a male homosexual who brought claims of retaliatory discharge, sex hostile work environment, and sexual orientation hostile work environment upon being terminated from employment. The trial court applied the McDonnell Douglas Corp. v. Green burden shifting framework to analyze the claims. The Court of Appeals held as follows:
- The trial court was correct to apply the McDonnell Douglas burden-shifting scheme when determining if the court should grant summary judgment to the employer.
- However, the trial court erred when it concluded that Dawson did not offer any evidence of pretext to rebut the employer's proffered legitimate reason for terminating Dawson. The court found there was circumstantial evidence such that if believed by a trier of fact, Dawson could prevail. Further, the court found that there was no legal precedent to support the employer's assertion that a probationary or temporary employee is subject to a different or lower standard.
- The court found that the trial court did not err when it dismissed Dawson's claim for IIED, because "[i]n the corporate context, a company's indifference to coworker harassment does not make out an IIED claim against the company."
Pending Cases:
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Sonic-Calabasas A, Inc. v. Moreno (2009) 174 Cal.App.4th 546, review granted, 99 Cal.Rptr.3d 866 (2009).
- (1) Can a mandatory employment arbitration agreement be enforced prior to the conclusion of an administrative proceeding conducted by the Labor Commissioner concerning an employee's statutory wage claim?
- (2) Was the Labor Commissioner's jurisdiction over the employee's statutory wage claim divested by the Federal Arbitration Act?
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Harris v. City of Santa Monica (2010) 181 Cal.App.4th 1094, review granted, 108 Cal.Rptr.3d 555 (2010).
- Does the "mixed-motive" defense apply to employment discrimination claims under FEHA?
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Brinker Restaurant Corp. v. Superior Court (Hohnbaum) (2008) 80 Cal.Rptr.3d 781, review granted, 85 Cal.Rptr.3d 688 (2008) (consolidated with Brinkley v. Public Storage, Inc.)
- Case addresses whether to "provide" a meal break means the employer must ensure the break is taken or simply has to make the break available and whether "early lunching" is permissible.
2011 Minimum Wages:
Computer Professionals $37.94/hr. $6,587.50/month $79,050/year
(unchanged)
Physicians & Surgeons $69.13/hr. $11,982.50/month $143,790/year
(unchanged)
San Francisco $9.92/hr. (up from $9.79 in 2010)
Federal $7.25/hr.
(unchanged)
California $8.00/hr.
(unchanged)
IRS business mileage reimbursement rate: 51 cents per mile (up from 50 cents per mile)
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About the Author
Frankel & Goldware serves clients throughout the 580-680 corridors, and the San Francisco Bay Area. Their clients include individuals, corporations, partnerships, family businesses, small to medium sized businesses, and non-profit organizations. Frankel & Goldware counsels individuals, families, and businesses on business and personal transactional matters, employment, litigation, real estate, probate, trust administration, and estate planning.
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