Employment Law

California Employers Face New Laws On January 1, 2014

Why it matters: Employers in California should ring in the New Year by updating their policies and training to reflect the new laws, particularly the major changes under San Francisco's new ordinance. Procedures for handling requests for time off for victims of stalking and crime should be established and managers and supervisors prepared for such requests and the resulting interactive process. Employers may also want to review their employment applications to make any changes regarding members of the military and veterans.

Detailed Discussion
California employers should brace themselves for a host of new employment-related laws set to take effect January 1, 2014.

In addition to raising the state's minimum wage to $9 per hour by July 1, 2014, and $10 per hour by January 1, 2016, Governor Jerry Brown recently signed bills that would increase protections for various categories of employees, from victims of stalking to members of the military and veterans.

Previously, the state Labor Code required employers to provide certain employment rights to victims of domestic violence and sexual assault. An amendment to Sections 230 and 230.1 has added victims of stalking, making it illegal to discharge, discriminate against, or retaliate against employees that request time off for issues related to stalking.

Time off from work may be requested to appear in court or obtain other legal relief, receive medical attention or psychological counseling related to the stalking, services from a program or shelter, or safety planning.

In addition, SB 400 requires employers to make reasonable accommodations for enhanced safety for stalking victims, including consideration of options such as transfer, reassignment, a modified schedule, changing an employee's work telephone number or work station, assistance in documenting the stalking, or installing locks. Employers may request certification for the need for an accommodation, such as a police report, court order, or documentation from a medical professional.

Employees may file a complaint for an alleged violation of the law with the state Division of Labor Standards Enforcement; a one-year statute of limitations exists.

Other groups receiving greater employment protection: members of the military and veterans. Under AB 556, several provisions of the Fair Employment and Housing Act were amended to add "military or veteran status" to the enumerated list of protected categories of employees, such as race, religion, color, national origin, physical disability, genetic information, and sexual orientation.

"Military or veteran status" is defined as "a member or veteran of the United States Armed Forces, United States Armed Forces Reserve, the United States National Guard, and the California National Guard." The law also provided an exemption for employers to inquire about military or veteran status for the purpose of awarding a veteran's preference as permitted by law.

A third new law protects crime victims from being discharged, discriminated against, or retaliated against pursuant to SB 288 for taking time off from work. Victims, defined as "any person who suffers direct or threatened physical, psychological, or financial harm as a result of the commission or attempted commission of a crime or delinquent act," can include a spouse, parent, child, sibling, or guardian.

The law, which added Section 230.5 to the Labor Code, provides a list of covered crimes, including vehicular manslaughter while intoxicated, felony child abuse likely to produce great bodily harm or a death, felony physical abuse of an elder or dependent adult, solicitation for murder, and "a serious felony."

Similar to the new protections for victims of stalking, employers may request certification for the time off from employees, who may use vacation, personal leave, or compensatory time off for the leave.

Reinstatement and reimbursement for lost wages and benefits are available to employees alleging violation of the new law in a complaint filed with the state's Division of Labor Standards Enforcement.

Finally, the city of San Francisco has adopted the "Family Friendly Workplace Ordinance" giving employees that work in the city the ability to request flexible work arrangements to care for a child, family member with a serious health condition, or parent over the age of 65 without retaliation.

Employers that directly or indirectly employ at least 20 workers in San Francisco are covered by the ordinance, which includes part-time employees who have worked for at least six months and regularly work at least eight hours per week.

A flexible schedule request must be made in writing and may seek changes to an employee's work location, work assignments, the numbers of hours required to be worked, or the time that an employee is required to work.

Employers must respond in writing within 21 days and may deny the request only for a bona fide business reason. The ordinance suggests possible reasons for a denial, such as the inability to organize work among other employees, a detrimental effect on the ability to meet client or customer demands, or identifiable costs, such as the cost of productivity loss.

Violation of the ordinance may result in an administrative penalty of $50 per violation for each day to both the city and the employee, as well as reinstatement, back pay and benefits, injunctive relief, and attorney's fees and costs.

To read SB 400, the new law for victims of stalking, click here.

To read AB 556, the new law for members of the military and veterans, click here.

To read SB 288, providing protections for victims of crime, click here.

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Despite Differences In Damages, Court Certifies Wage-And-Hour Class

Why it matters: Plaintiffs in wage-and-hour suits scored a victory in the Benton v. Telecom Network Specialists decision, with the appellate panel instructing state courts to focus on the theory of liability alleged in the complaint – not the practical difficulties of determining damages down the road. For employers, the decision may present a roadblock in fighting a certification motion, even where employees will be subject to individualized damages inquiries.

Detailed Discussion
The focus of a class certification motion in a wage-and-hour lawsuit should be the plaintiffs' theory of liability – not the fact that class members may be entitled to different damage awards, according to a recent decision from the California Court of Appeal.

The dispute began when a group of cell phone tower technicians filed suit against Telecom Network Services, alleging violation of meal and rest break requirements and failure to pay overtime. Class members included technicians hired directly by TNS as well as those hired by various staffing companies that contracted with the defendant.

Arguing that TNS was the employer for both categories of workers, the plaintiffs moved to certify a class of roughly 750 technicians.

TNS objected. Common issues did not predominate among the class because technicians worked under "a diversity of workplace conditions," the employer argued, and the staffing companies had adopted different policies regarding meal, break, and overtime during the class period.

A trial court denied certification. But on appeal, the three-judge panel found that the lower court relied upon improper criteria to make its ruling.

Applying the California Supreme Court's decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), the court explained that the focus during a certification proceeding is on the plaintiffs' theory of liability.

So an allegation that an employer had a policy of violating state wage laws would satisfy the requirement of a common issue, and employees do not have to demonstrate whether they missed a meal break by choice or by force, the court said.

Such an individualized inquiry will be relevant at the damages stage, the court acknowledged, but does not preclude class certification.

"[T]he fact that individual inquiry might be necessary to determine whether individual employees were able to take breaks despite the defendant's allegedly unlawful policy (or unlawful lack of policy) is not a proper basis for denying certification," the panel wrote. "Rather, for purposes of certification, the proper inquiry is 'whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment.' In this case, the plaintiffs' theory of recovery is that TNS violated wage and hour requirements by failing to adopt a policy of authorizing and permitting meal and rest breaks to its technicians."

Different policies on meal and rest breaks at various staffing agencies did not matter, the court added. Under Brinker, TNS could be liable to the class as a joint employer if a fact finder determined that its lack of a policy violated the applicable Wage Order.

The panel reversed denial and remanded the case for reconsideration of the plaintiffs' motion for class certification.

To read the opinion in Benton v. Telecom Network Specialists, click here.

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Repeated, Unaddressed Complaints May Result In Punitive Damages

Why it matters: In the Davis v. Kiewit Pacific Co. case, the appellate panel sent a very clear message to employers: Evidentiary requirements cannot be met simply by a restatement of the applicable legal standard in an employee's declaration. Instead, to back up a motion for summary judgment on the issue of managerial discretion, employers must provide a sufficient description of job duties, responsibilities, authority, and discretion to support an argument that an employee is not a managing agent of a corporation. Otherwise, punitive damages may remain on the table in a plaintiff's FEHA suit.

Detailed Discussion
Punitive damages may be appropriate under California's Fair Employment and Housing Act where a female worker's repeated complaints about unsanitary conditions went unaddressed by her employer, the California Court of Appeal has ruled.

Lisa Davis was a box grader operator employed by Kiewit Pacific Co. on a $170 million project to excavate a 12-mile segment of canal and line it with concrete. As one of just two women on the day shift excavation crew, Davis had difficulty accessing portable toilets, which were often in an unsanitary condition. She complained to her foreman, the day shift superintendent, the night shift superintendent, and the safety officer, to no avail.

After being told to "go find a bush," Davis complained to the project manager, the highest-ranking employee on the site. Not long after, she found feces smeared all over the toilet seat and a pornographic magazine in the women's portable toilet, which she felt was retaliation for her complaints. She spoke with the equal employment opportunity officer. Days later, she was laid off along with the rest of the excavation crew. But within three weeks, many members were re hired and Davis was not.

A jury found Kiewit liable for gender discrimination, hostile work environment harassment, retaliation, and failure to prevent harassment, gender discrimination, or retaliation, awarding her $270,000.

Prior to trial, the judge granted Kiewit's motion for summary judgment on the issue of punitive damages. Davis appealed.

She argued that a triable issue of material fact remained as to whether her supervisor and the company's equal employment officer exercised "substantial discretionary authority over significant aspects" of the company's business.

The court agreed.

Davis provided evidence that the project manager she complained to was in charge of the $170 million project, with all other Kiewit managers reporting to him, and that he had the duty to interface with stakeholders, perform contract administration, and handle operations and personnel oversight. As for the EEO officer, he was responsible for the entire district, conducting training and overseeing investigations, Davis said.

In response, Kiewit provided declarations from both men, which stated: "I am not an officer or director of Kiewit. As a Kiewit employee, I have never drafted corporate policy or had substantial discretionary authority over decisions that ultimately determine Kiewit's corporate policy."

This language came straight from California case law establishing the standard on managerial discretion, a 1999 decision in White v. Ultramar, Inc., 21 Cal. 4th 563. But the panel said a mere restatement of the applicable legal standard did not suffice.

"Kiewit cannot satisfy its initial burden of production of evidence by making a conclusory statement of law, whether directly or through a declaration of one of its employees," the court wrote. "Kiewit had the initial burden to produce sufficient evidence to make a prima facie showing that there was no triable issue regarding whether [the project manager] was a managing agent of Kiewit.

"We conclude Kiewit, by simply restating the applicable legal standard under White for the determination of whether [the project manager] was its managing agent, did not satisfy its initial burden of production."

Further, the company failed to provide a sufficient description of the relevant job duties and responsibilities, the nature and extent of authority and discretion, and how the project manager exercised his authority and discretion.

"Absent evidence showing that management of a $170 million project with supervision of 100 employees is an insignificant part of Kiewit's business, a trier of fact could reasonably infer . . . that [the project manager] 'exercised substantial discretionary authority over significant aspects of [Kiewit's] business' and therefore was a managing agent of Kiewit," the court said.

The court reached a similar conclusion with regard to the EEO officer, reversing summary judgment for the employer on the issue of punitive damages.

To read the decision in Davis v. Kiewit Pacific Co., click here.

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Undue Hardship Allows Employer To Avoid Religious Accommodation

Why it matters: Cases involving religious accommodations pursuant to Title VII have made headlines recently as employers struggle to manage an increasingly diverse workforce. Judge Camp’s ruling may provide some comfort to employers that establishing an undue hardship is not an impossible feat, as long as a company can present actual dollar amounts and specific examples of the substantial, negative impact of the proposed accommodation.

Detailed Discussion
Safety concerns and costs amounted to an undue hardship on a meat processing company such that Muslim employees requesting a prayer break did not legally need to be accommodated.

JBS owns and operates a beef plant located in Grand Island, Nebraska, where approximately 200 of the 2800 employees were Somali Muslims during 2007-2008. The plant operated in two shifts: an A shift from 6 a.m. to 2:30 p.m. and a B shift from 3 p.m. to 11:30 p.m. Approximately 120-130 Somali Muslims worked on the B shift.

Scheduled break times varied at the plant and occurred on a rolling basis to avoid a full halt of the production chain. The company rarely used “mass” breaks for all employees because its restrooms and cafeterias could not accommodate all the employees at one time and a complete stop to the product line posed serious food safety concerns.

Problems arose when Muslim employees sought to use breaks for prayer time. The employees sought extra breaks during the day for prayer on a regular basis and a sundown prayer break during Ramadan. JBS and the local union worked to find a break schedule that could work for the Muslim employees (with the time of sundown changing throughout the month long celebration) and the plant.

JBS attempted to add an extra break for Muslim employees, which resulted in a walkout and protest by non-Muslim employees. When the company changed course and eliminated the extra break for prayer, the Muslim employees refused to work and were terminated.

The Equal Employment Opportunity Commission brought suit on their behalf, alleging JBS violated Title VII by failing to accommodate the Muslim employees’ religious needs.

JBS asserted undue hardship as an affirmative defense. Accommodating the extra prayer break imposed several burdens on the company, including jeopardizing food safety (cross-contamination could occur when employees were unable to keep up with the line and failed to sterilize knives) as well as employee safety, with the remaining employees forced to work faster to keep up with the movement of the product. Additional breaks cost additional overtime when employees had to stay late to catch up on product, and employee morale took a hit with the non-Muslim employees feeling that they were doing extra work while others got extra breaks.

First, U.S. District Court Judge Laurie Smith Camp found that the EEOC had established a prima facie case of unlawful discrimination for failure to accommodate. But she then ruled that JBS had successfully demonstrated an undue hardship by showing that the requested accommodation created more than a de minimis cost and caused more than a de minimis imposition on co workers.

“Testimony established that if the slaughter and fabrication lines were not stopped to accommodate absent workers, remaining workers on the lines would need to work at dangerous speeds,” Judge Camp wrote. “If a line were stopped or slowed, raw meat might be exposed to air and bacteria for a prolonged time, increasing the risk of contamination or adulteration of the product. The evidence demonstrated that such safety and quality concerns would be particularly elevated if JBS were to attempt to allow up to 200 employees to take unscheduled breaks within a short window of time.”

The court noted that the direct financial impact on JBS of one additional 10-minute prayer break would cost $100 per minute on the slaughter side and $225 on the fabrication side – a total of $18,180 per day at the plant. “[E]xtra breaks for prayers, within the parameters requested by the Muslim workers, would have created a substantial financial burden on JBS,” the court concluded.

Co workers also would have shouldered a significant burden, Judge Camp said. “Non-Muslim employees would be required to work harder, under rigorous or potentially dangerous conditions, in part because they did not share their co-workers’ religious beliefs.”

A mass break of all employees on the B shift during Ramadan’s sunset prayer presented similar obstacles, the court found, as demonstrated by JBS’s attempts to accommodate the request. For such a break, approximately 50 to 60 heads of cattle would have to be reclassified for remaining on the kill floor too long, cutting the value of each by 50 percent. In addition, meat on the fabrication side would be exposed to bacteria and tables could not be cleaned and sanitized.

“These circumstances demonstrate that the Muslims’ proposed mass meal break would have imposed more than a de minimis burden on JBS, resulting in undue hardship,” the court determined.

To read the court’s findings of fact and conclusions of law in EEOC v. JBS USA LLC, click here.

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