Employment Law

California Supreme Court to Consider "Day of Rest" Law

Why it matters

The California Supreme Court has agreed to weigh in on the number of consecutive days an employee may legally work without running afoul of the state's so-called "day of rest" statute. The issue arose when two employees of Nordstrom claimed the employer required them to work for more than six consecutive days without a day off, in violation of the law. Following a bench trial, a federal court judge ruled in favor of Nordstrom. The plaintiffs appealed, but uncertain about how to interpret the statute, the Ninth Circuit Court of Appeals certified three questions to the state's highest court. The panel asked whether the required day of rest referenced in California's law should be calculated by the workweek or on a rolling basis for any consecutive seven-day period, also wondering about the application of a Labor Code exemption for employees who work fewer than 30 hours in a week or six hours in one day. Finally, the Ninth Circuit requested clarification about what it means for an employer to "cause" a worker to work more than six days in seven—force, coerce, pressure, schedule, encourage, reward, permit, or something else? The California Supreme Court agreed to tackle the questions, and employment lawyers should stay tuned for answers in the coming months.

Detailed discussion

In 2009, Christopher Mendoza filed suit against his former employer, Nordstrom. According to Mendoza, during his tenure as a barista at a Nordstrom espresso bar and a sales representative in the cosmetics department, the national retailer violated Sections 551 and 552 of the California Labor Code, the so-called "day of rest" law.

Section 551 provides that "[e]very person employed in any occupation of labor is entitled to one day's rest therefrom in seven," while Section 552 states that "[n]o employer of labor shall cause his employees to work more than six days in seven." California Labor Code Section 556 exempts an employer from the day of rest requirement "when the total hours [worked by an employee] do not exceed 30 hours in any week or six hours in any one day thereof."

Mendoza claimed that he worked more than six consecutive days on three occasions, one time working 11 days straight (although working fewer than six hours on two of those days), seven straight days another time (with fewer than six hours on three days), and eight consecutive days (five with fewer than six hours). On each of these occasions, Mendoza was not originally scheduled to work more than six consecutive days but did so after being asked by a coworker or supervisor to fill in for another employee.

A second employee, Megan Gordon, joined the suit in April 2011. She worked as a fitting room attendant at a Nordstrom Rack store for more than six consecutive days on one occasion, although on two of those days she worked fewer than six hours.

After a two-day bench trial, a California federal court judge sided with Nordstrom.

Section 551 applies on a rolling basis to any consecutive seven-day period rather than a workweek as defined by an employer (such as Nordstrom's Sunday-to-Saturday schedule), the court said. While that would appear to mean the defendant violated Sections 551 and 552, Labor Code Section 556 exempted Nordstrom from liability because each plaintiff worked fewer than six hours on at least one day in the consecutive seven days of work. And even if the exemption did not apply, Nordstrom did not "cause" Mendoza or Gordon to work more than seven consecutive days because they voluntarily chose to waive their rights and work extra days, the court added.

"The day of rest statutes only prohibit an employer from requiring or causing an employee to work more than six consecutive days," U.S. District Court Judge Cormac J. Carney wrote. "An employee can waive that protection if he or she wants to, which is exactly what Mr. Mendoza and Ms. Gordon did here."

This conclusion was consistent with the regulatory history of the "day of rest" law and was also confirmed by the California Supreme Court in Brinker Restaurant Corp. v. Superior Court, where the court found that employees could waive their right to a meal break, the court explained.

Gordon and Mendoza appealed to the Ninth Circuit Court of Appeals.

A panel of the federal appellate court considered the issue and, finding no controlling California precedent and an ambiguous statutory text, turned to the California Supreme Court for help.

The panel certified three questions to the state's highest court:

(A) California Labor Code section 551 provides that "[e]very person employed in any occupation of labor is entitled to one day's rest therefrom in seven." Is the required day of rest calculated by the workweek, or is it calculated on a rolling basis for any consecutive seven-day period?

(B) California Labor Code section 556 exempts employers from providing such a day of rest "when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof." Does that exemption apply when an employee works less than six hours in any one day of the applicable week, or does it apply only when an employee works less than six hours in each day of the week?

(C) California Labor Code section 552 provides that an employer may not "cause his employees to work more than six days in seven." What does it mean for an employer to "cause" an employee to work more than six days in seven: force, coerce, pressure, schedule, encourage, reward, permit, or something else?

The Ninth Circuit said it found the interpretations proffered by both sides plausible, discovered no useful legislative history, and unearthed no California appellate law to provide a guide, so it turned to the California Supreme Court with "the obligations of thousands of California employers, and the rights of tens of thousands of California workers … at stake."

To read the Ninth Circuit's order in Mendoza v. Nordstrom, click here.

To visit the California Supreme Court's page for Mendoza, click here.

back to top

You Choose, You Lose: Court Tosses Suit Over Bag Searches Where Employees Chose to Bring Them

Why it matters

Apple recently scored a victory when a California federal court tossed a lawsuit brought by employees at retail locations seeking compensation for time spent having their bags checked. After the court certified a class of more than 12,000 current and former workers at stores in the state, Apple moved for summary judgment. The plaintiffs had to prove two elements to prevail, the court said: that the employer restrains the employee's action during the activity in question and that the employee has no plausible way to avoid the activity. While the judge found that the workers met the first element, they failed to satisfy the second as "the Apple worker can choose not to bring to work any bag or other items subject to the search rule." Apple let employees choose whether or not to bring bags and personal Apple devices into the store subject to the condition that the items must be searched when they left, the court explained. The "ability to bring a bag into Apple's stores is simply an optional benefit with a string attached—the requirement to undergo searches," the court said, granting summary judgment in favor of the employer.

Detailed discussion

In 2013, Amanda Frlekin sued Apple Inc. along with four other hourly paid and nonexempt employees who worked at California retail stores. The plaintiffs asserted claims under California law and the Fair Labor Standards Act (FLSA) for the time spent undergoing exit searches pursuant to Apple's bag search and technology card search policies and for the time spent waiting for the searches to occur.

Apple implemented the search policies because of concerns with internal theft of products. The "Employee Package and Bag Searches" policy imposed mandatory searches of all bags, purses, backpacks, or briefcases whenever workers left the store. Employees also filled out a "Personal Technology Card" that listed the serial numbers of their personal Apple devices, a list that was checked during the exit search to ensure any devices were already owned.

The policies detailed when and how the searches were to be conducted, and each of the 52 Apple stores in California performed the searches. The employees argued that they had to clock out prior to undergoing a search and their recorded hours did not account for the time spent finding a manager or a security guard to perform the search, that they had to wait in line if multiple employees sought to leave at the same time (such as at the end of a shift), or had to wait until the manager or security guard was free to conduct the search.

In earlier motion actions, the plaintiffs' FLSA claims were dismissed following the U.S. Supreme Court's decision in Integrity Staffing Solutions, Inc. v. Busk, where the court held that time spent during mandatory security screenings was not compensable under the federal statute.

The court certified a class of plaintiffs asserting California state law wage claims, and the parties narrowed the issue as to whether Apple had to compensate its employees for time spent waiting for bag searches for workers who voluntarily brought a bag to work purely for personal convenience. Importantly, no class members intervened in the action arguing they had special needs to bring a bag to work and none opted out.

Apple then moved for summary judgment.

Wage Order 4 requires employers to pay employees a minimum wage for "all hours worked in the payroll period," defining "hours worked" as "the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so."

Given this, the plaintiffs were required to prove two elements, the court said: that the employer "restrains the employee's action during the activity in question," and that "the employee has no plausible way to avoid the activity; put differently, the activity must be mandatory and not optional at the discretion of the worker."

"Here, the first element is met, namely control, for once the worker wishes to leave with a bag, the worker is restricted and must stand in line for the security screening," U.S. District Court Judge William Alsup explained. "The second element, however, is not met, for the Apple worker can choose not to bring to work any bag or other items subject to the search rule."

Apple could have prohibited employees from bringing bags and personal devices into the store altogether, the court pointed out. Instead, "Apple took a milder approach to theft prevention and offered its employees the option to bring bags and personal Apple devices into a store subject to the condition that such items must be searched when they leave the store."

Employee choice was dispositive and there was no dispute the plaintiffs had the freedom to elect to avoid searches. "It is undisputed that some employees did not bring bags to work and thereby did not have to be searched when they left the store," the court said.

The class limited itself to adjudicating liability for employees who voluntarily brought a bag to work purely for personal convenience, Judge Alsup said, noting that no plaintiffs intervened to assert claims based on any special-needs scenario that might have made the choice to bring a bag or not illusory. "The ability to bring a bag into Apple's stores is simply an optional benefit with a string attached—the requirement to undergo searches," he wrote, and the plaintiffs could have "avoided searches by declining to bring bags or Apple technology to work."

Judge Alsup rejected the argument that bringing a bag to work was not an affirmative benefit but a standard freedom of the job. "Apple was concerned that its employees could pilfer merchandise in their bags or claim that they already owned any Apple products they carried out of the store," the court said.

"Apple could have alleviated that concern by prohibiting its employees from bringing personal bags or personal Apple devices into the store. Instead, Apple took the lesser step of giving its employees the optional benefit of bringing such items to work, which comes with the condition that they must undergo searches in a manner dictated by Apple before they exit the store."

That free choice was fatal to the plaintiffs' claims, the court concluded.

As for the "suffered or permitted to work" prong of the analysis, the court said the searches had no relationship to the plaintiffs' job responsibilities and were simply peripheral activities relating to Apple's theft policies. Analogizing to the Integrity Staffing Solutions decision, the court said the security screenings undergone by Frlekin and her fellow Apple workers were two steps removed from their productive activity, just like those in the U.S. Supreme Court case.

"The time our plaintiffs spent waiting for the searches to be completed plainly does not constitute 'work' under the 'suffered or permitted' prong," Judge Alsup said. "Our plaintiffs merely passively endured the time it took for their managers or security guards to complete the peripheral activity of a search. Neither the searches nor waiting for them to be completed had any relationship to their job responsibilities. They cannot be compensated for that passive activity under the 'suffered or permitted' prong."

Denying summary judgment for the plaintiffs, the court granted the motion in favor of Apple.

To read the order in Frlekin v. Apple Inc., click here.

back to top

Race to Raise Minimum Wage Continues, New York Hits $15

Why it matters

Watch out, Chicago, Los Angeles, San Francisco, and Seattle: New York will soon join the highest reaches of minimum wage payments at $15 for state workers after Governor Andrew Cuomo announced a rate hike to be completed by 2021. The move follows his increase to $15 for fast-food workers earlier this year, and although Seattle was the first jurisdiction to reach the $15 mark, the hike will make New York the first state to do so. "I believe that if you work hard and work full time, you should not be condemned to live in poverty," Governor Cuomo said in a statement about the increase. "Today in New York, we are leading by example and creating an economy that is defined by opportunity, not inequality." The schedule of pay raises differs for New York City residents, who will hit $10.50 on December 31 and continue to increase until reaching $15 per hour on December 31, 2018, and the rest of the state, which will not hit $15 until July 1, 2021. The bigger question for employers: will other cities and states follow the trend?

Detailed discussion

Becoming the first state to reach the $15-per-hour minimum wage mark, Governor Andrew Cuomo announced that New York will raise its hourly pay for state workers. The move did not come as a total surprise given Governor Cuomo's repeated efforts at increasing the hourly payment rate. He signed a bill increasing minimum wage from $7.25 to $8.75 in 2013 that included another step up to $9 at the end of 2015. He also accepted the recommendations of a wage board empaneled by the State Department of Labor to raise the hourly wages of tipped workers from $4.90 up to $7.50 and directed the Department of Labor to empanel another wage board earlier this year to consider hiking the minimum wage for fast-food workers. After an investigation, the wage board recommended a jump to $15 per hour, a move that will impact an estimated 200,000 workers.

"I believe that if you work hard and work full time, you should not be condemned to live in poverty. Yet millions of families nationwide continue to be left behind by an insufficient minimum wage—and it's time that changed," Governor Cuomo said in a statement about the increase. "Today in New York, we are leading by example and creating an economy that is defined by opportunity, not inequality. We are restoring the fairness and economic justice that built the American dream and standing up for what's right. I am proud of what we continue to accomplish, because New Yorkers deserve nothing less."

Governor Cuomo estimated that approximately 10,000 state employees will benefit from the pay hike, which includes all workers in executive agencies, the legislature, and the judiciary, as well as the Office of the State Comptroller and the Department of Law. Of the employees, about 1,000 are located within New York City and 9,000 are elsewhere in the state.

The phase-in schedule differs based on residence. New York City workers will step up to $15 beginning December 31, 2015, with a jump to $10.50, then $12 on December 31, 2016, $13.50 on December 31, 2017, and reaching $15 on December 31, 2018. For the rest of the state, the increase will take longer. Hourly rates outside of the City will rise to $9.75 on December 31, 2015, $10.75 on December 31, 2016, $11.75 on December 31, 2017, $12.75 on December 31, 2018, $13.75 on December 31, 2019, $14.50 on December 31, 2020, and finally, $15 on July 1, 2021.

With the increase, New York joins the upper echelons of minimum wage payments. Seattle hit the $15 mark first last year, followed by Chicago, Los Angeles, and San Francisco.

To read Governor Cuomo's remarks about the increase or watch a video of his statement, click here.

back to top

Surrogate Mother's Discrimination Claims Move Forward Against Employer

Why it matters

A California federal court judge refused to dismiss a surrogate mother's claims that she was not provided with accommodations in violation of the federal Pregnancy Discrimination Act and California's Fair Employment and Housing Act, moving the case forward. Mary Gonzales sued Marriott International earlier this year alleging that the hotel chain discriminated against her for being a surrogate mother, demonstrated by the fact that she was only permitted to take lactation breaks for a few weeks before being told she had to use her lunch break to pump—while other lactating women were granted breaks—because she wasn't feeding a child at home. Marriott moved to dismiss the lawsuit, contending that the law does not mandate that employers provide extra lactation breaks when employees express milk for a child not their own. But the judge sided with Gonzales and denied the motion, writing that the employer's "narrow" interpretation of the law was incorrect. Reasonable jurors "could conclude that Gonzales was subjected to the treatment she was because Marriott perceived she did not conform to stereotypical views of how women act as it relates to motherhood or child bearing," the court said.

Detailed discussion

A full-time general accountant and cashier at the Los Angeles Airport Marriott, Mary Gonzales entered into a gestational surrogacy agreement. She became pregnant in August 2013 and gave birth to a healthy female child on April 22, 2014. An hourly employee, Gonzales was allowed one unpaid 30-minute lunch break and two paid 10-minute rest breaks per day.

After giving birth, Gonzales expressed milk several times a day for the child's family. During her maternity leave, she e-mailed her manager to inform him that she would need to express milk twice a day when she returned. When she did come back to work in June, she expressed milk twice a day in her office for about 10 days, with each session lasting 25 to 30 minutes. After she realized her office was equipped with video surveillance, Gonzales began using a lactation room set up in a nearby empty office that other female employees also used. For another two weeks, Gonzales used her two breaks to express milk in the lactation room.

At the end of June, her obligation to provide milk to the child's family ended, but Gonzales continued to express milk due to the personal health benefits, donating the milk she pumped. According to Gonzales, she was informed by her manager on June 30 that she could only take breaks to express milk for another 30 days and then would no longer be given the time to do so. She objected, and asserted that her manager replied in an "angry and dismissive" tone. Told that she was "not disabled" and not feeding "a child at home," Gonzales said she was instructed she could only use her lunch break to express milk.

Gonzales filed suit against Marriott, alleging violations of the California Fair Employment and Housing Act (FEHA) and the Pregnancy Discrimination Act amendments to Title VII. She claimed that other female employees were accommodated because they were nursing children at home and that she suffered clogged ducts, severe breast pain and soreness, and loss of sleep from having to express at night because she couldn't do so during the day.

Marriott moved to dismiss the suit. The employer pointed to Labor Code Section 1030 to argue the lactation accommodation requirements under state law are limited to employees who express breast milk for their own children. The provision states: "Every employer … shall provide a reasonable amount of break time to accommodate an employee desiring to express breast milk for the employee's infant child."

Based on this language, the employer argued that the Legislature clearly did not intend to require employers to accommodate employees who wished to express milk for other reasons.

But U.S. District Court Judge Margaret M. Morrow took issue with Marriott's "narrow focus" on the language of the provision. Compliance with Section 1030 "is but one example in a non-exhaustive list of accommodation options," she wrote, and does not consider the range of other reasonable accommodations to achieve compliance with FEHA and its interpreting regulations.

Other factors relating to the accommodation—the length of time employers must accommodate lactating employees and whether lactation breaks should be paid or unpaid—are questions for a jury under the facts and circumstances of the case, the court added. Similarly, for Marriott's contention that it had no requirement to accommodate Gonzales after she stopped sending expressed milk to the child's family, the court deferred to the jury.

"First, Gonzales may be able to adduce evidence that there were health reasons that led her physician to recommend continued lactation," the judge wrote. "Second, whether it is 'reasonable' to require an employer to accommodate an employee's desire to express milk that she intends to donate or sell is a question of fact for the jury."

The legislative history behind Section 1030 was insufficient to support Marriott's position, the court said, because it did not reveal any "intent to exclude employees who are not nursing their own children from seeking accommodation to express breast milk at work," and "notes the health benefits of lactation for a woman who has given birth," which are present whoever receives the expressed milk.

Permitting other women to express milk at work did not alleviate the employer from Gonzales' assertion that she was discriminated against because of her sex. Title VII protects individuals, as well as groups, Judge Morrow explained, and simply allowing other women to take breaks to express milk did not defeat Gonzales' claim.

Considering Gonzales' sex stereotyping claim, the court noted literature about the stereotyping of gestational surrogates as well as a lack of case law endorsing impermissible sex stereotyping as the basis for liability under Title VII.

"While the matter is not free from doubt, the court declines, at this stage of the proceedings, to dismiss the sex stereotyping claims on the basis that being a gestational surrogate is not a form of sex-based stereotype," the judge said. "It is true that such a stereotype draws a distinction between two categories of women rather than between men and women. It is also true that it does not appear directly to concern the manner in which an employee does her work," but a direct connection between job performance and sex stereotype has not always been required.

"Here, a reasonable jury could conclude that Gonzales was subjected to the treatment she was because Marriott perceived she did not conform to stereotypical views of how women act as it relates to motherhood or childbearing," the court said, ruling without prejudice to allow the employer to raise the issue at a later stage of the proceedings.

Judge Morrow also analyzed whether Gonzales adequately alleged an adverse employment action. Workplace ostracism (exclusion from lunches and social events because that was her only time to express milk), inconvenience due to changes in her work schedule, and a few negative encounters with management were insufficient, the court said. However, Gonzales was not permitted to take paid breaks like other lactating employees after a certain point, and if she can prove that she was entitled to reasonable accommodation in the form of lactation breaks, paid or unpaid, the denial of such breaks could constitute adverse employment action, the court decided.

The court denied Marriott's motion to dismiss.

To read the order in Gonzales v. Marriott International, Inc., click here.

back to top

Whistleblower Protections Available For Reports of Personal Interest, California Court Affirms

Why it matters

Can an employee qualify for whistleblower protections where the reported disclosure did not relate to the employer, its operations, or the public interest? Yes, a California appellate panel ruled, affirming a jury verdict in favor of an employee who filed a police report after her ring was stolen at work. A dental hygienist lost an expensive ring at the office, and suspecting that a coworker stole it, she filed a police report. The police twice visited the office to interview the other employees, and the hygienist was fired for disrupting the workplace. She sued, claiming that her termination violated Labor Code Section 1102.5. The employer countered that the hygienist was not entitled to whistleblower protections because she was reporting on a matter of personal interest, but a jury awarded her almost $118,000. An appellate panel affirmed the verdict, writing that the Labor Code only required the plaintiff to prove that she reported a matter to a government authority and that she was subsequently discharged for doing so—not that the reported activity had to involve a matter of public interest or the employer's practices or business operations.

Detailed discussion

Rosa Lee Cardenas worked as a dental hygienist in the dental office of Dr. Masoud Fanaian, D.D.S. In 2010, to celebrate their 25th wedding anniversary, Cardenas' husband bought her a new, expensive ring. She always wore the ring to work but placed it in the blouse pocket of her scrubs at the start of each workday.

One day, she got home from work and realized the ring was gone. She said she had taken the ring off and placed it on the breakroom table with her cell phone and other belongings. When she picked up her things, the ring was missing but she assumed she had already put it in her pocket, as was her habit. She called her coworkers, searched the office, the parking lot, her car and home, but did not find the ring.

Cardenas suspected that a coworker had stolen the ring. She informed Dr. Fanaian that she planned to file a police report, and although he told her, "[D]o what you feel like you need to do," he seemed upset or angry and asked her not to tell the police she left the ring on the breakroom table.

She filed a police report and officers came on two occasions to the office to question her coworkers. According to Cardenas, Dr. Fanaian told her the situation was causing tension and discomfort among the staff and he was letting her go. The ring was found at the office the next day.

Cardenas filed suit against the dental office asserting two causes of action: retaliation in violation of Labor Code Section 1102.5 and wrongful termination in violation of public policy. At trial, the defendant moved for nonsuit after Cardenas rested her case in chief, arguing that she failed to prove that her termination involved a fundamental public policy. The trial court denied the motion and the jury awarded her a total of $117,768 for past economic losses.

The defendant appealed. As a matter of law, there was no fundamental public policy violation in connection with Cardenas' firing, the employer told the court.

Affirming the jury verdict, the court rejected the employer's position.

Section 1102.5 states: "An employer may not retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation." A statutory claim under this provision stands on its own, the court said, and does not require proof of a violation of public policy.

"Section 1102.5 has been broadly construed to protect an employee from retaliation by his or her employer even where the report to law enforcement concerned a violation of law committed by a fellow employee or contractor, and not the employer," the appellate panel wrote. "The jury determined that Cardenas reported a workplace theft of her property to the police. Theft is a violation of the law. The jury found that she was subsequently terminated from her employment and that her report to the police was a motivating reason for her termination. Thus, she engaged in protected activity, was subjected to an adverse employment action and there was a causal link between the two. She met all of the statutory elements of a claim under Section 1102.5. She was not required to prove anything more."

The plain language of the statute does not mandate that the violations of law reported by the employee concern the employer's business activities, the panel said. "Defendant would have us insert additional, limiting language into the statute, namely, that the report to law enforcement must relate directly to the employment enterprise and not private or individual matters," the court wrote. "This we cannot do. Even if the Legislature intended to limit the statute's application to reports of wrongdoing concerning the employer's enterprise, operations or practices, courts are not authorized to disregard the plain meaning of statutory language in order to conform it to a court's opinion of legislative intent."

In a separate provision for state workers, the Legislature specifically and expressly limited whistleblower protection to reports of wrongdoing arising out of the performance of the employee's duties, the panel pointed out, demonstrating that lawmakers knew how to include such language in Section 1102.5 had they wanted to.

Language found in the statute's uncodified preamble did not sway the panel. While consideration of the preamble could help the court's review, it was not controlling and any light it shed was "at best, uncertain," the court said. "[W]e believe the plain meaning of the statute would control over a preamble that merely serves as an aid to our analysis."

A dissenting opinion argued for reversal of the jury's verdict, relying upon the preamble, which makes references to the "unlawful activities of private corporations," "corporate wrongdoing," and "laws enacted for the protection of corporate shareholders, investors, employees, and the general public."

"I do not believe the statute can reasonably be interpreted as extending protection to matters of a purely private and personal interest that have no meaningful relationship to the employer's business activities and are uniquely important to the employee who has reported a suspected violation of law," the dissent wrote. "By countenancing application of the whistleblower statute to reports of private matters which coincidentally involve an employee's coworker, the majority has created a new exception to the venerable rule of at-will employment that was never intended by our Legislature."

To read the opinion in Cardenas v. M. Fanaian, D.D.S., click here.

back to top

manatt-black

ATTORNEY ADVERTISING

pursuant to New York DR 2-101(f)

© 2020 Manatt, Phelps & Phillips, LLP.

All rights reserved