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I.
Legislative Update
National
The following employment bills are still pending in our federal Congress.
H.R. 493 and S. 358. These identical bills, entitled The Genetic Information Nondiscrimination Act, propose to make it unlawful for an employer to discriminate against an employee based on the employee's, or a family member's, genetic information. Subject to narrow exceptions, the bills forbid employers from requesting, requiring, or purchasing genetic information.
H.R. 1338 and S. 766. These bills propose to amend the portion of the Fair Labor Standards Act known as the Equal Pay Act and to revise the remedies for, and the enforcement of, prohibitions against sex discrimination in the payment of wages so as to: (1) add non-retaliation requirements; (2) increase penalties; and (3) authorize the Secretary of Labor to seek additional compensatory or punitive damages. These bills are both in committee.
H.R. 1369. This bill primarily proposes to expand the Family and Medical Leave Act to apply to all employers with 25 or more employees, rather than the current cutoff of 50 or more employees. This bill remains in committee.
H.R. 1542 and S. 910. These bills are referred to as The Healthy Families Act and propose to require all employers in the United States that have 15 or more employees to provide their employees who work more than 30 hours per week with seven paid sick days per year. Part-time employees working more than 30 hours per week would receive a pro-rata percentage of that paid leave. The bills are in committee.
H.R. 2015 The proposed Employment Non-Discrimination Act of 2007 would prohibit employers from discriminating against employees due to sexual orientation or gender identity and would prohibit related retaliation.
H.R. 2831. This bill was proposed in response to the recent U.S. Supreme Court decision of Ledbetter v. Goodyear Tire & Rubber Co. It proposes to amend the Civil Rights Act of 1964 and the Age Discrimination Act of 1967 to declare that an unlawful employment practice occurs each time an employee is affected by a discriminatory compensation decision or other adopted practice. Thus, if an action (e.g., denial of an annual raise) is found to be discriminatory, then each pay period would constitute a separate, unlawful practice. The bill provides that an employee can recover back pay for up to two years preceding the filing of the charge. This bill has passed the House and is now before the Senate.
H.R. 3010 and S.1782 These bills, referred to as the Arbitration Fairness Act of 2007, provide that no pre-dispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment dispute or a dispute arising under any statute intended to protect civil rights. These bills also provide that the enforceability of an arbitration agreement shall be determined by a court, under federal law, rather than by an arbitrator. These bills expressly exempt arbitration provisions in collective bargaining agreements. These bills are in committee.
S. 1928: This bill known as the Equal Remedies Act of 2007 has been introduced to eliminate the current caps on damages in cases filed under the Civil Rights Act of 1991.
Various. Several bills are pending in the federal Congress proposing to overhaul and reform certain aspects of the immigration laws, including the imposition of a mandated electronic employment verification system and new digitized Social Security cards.
State
September 14, 2007 was the final day for the State Assembly and the Senate to pass bills to take effect on January 1, 2008. The following employment bills have passed both chambers and have been sent to the Governor, who can either sign a bill, veto it, or allow it to become law with his signature.
AB 8. This Assembly bill proposes to require employers, by January 1, 2009, to provide health care to employees and their dependents in an amount equivalent to 7.5 percent of the employer's total social security wages. Alternatively, employers could elect to have health care coverage provided through a state program with a minimum payment and to set up a pre-tax Section 125 plan.
AB 343. This bill would require the State Department of Health Care Services to transmit a report to the Legislature identifying all employers with 25 or more employees who are also beneficiaries (or who support beneficiaries) of programs under which low-income persons are provided health care services.
AB 392. This bill proposes to take effect immediately and would require employers with 25 or more employees to allow a spouse of certain members of the Armed Forces, National Guard, or Reserves deployed during military conflict to take up to 10 days of unpaid leave when the service member is home on leave.
AB 435. This Assembly bill proposes to require wage and job classification record retention for five years and would also expand the statutes of limitations to four years for a civil action claiming unequal wages and to five years for actions involving willful misconduct of the employer.
AB 537. This State Assembly bill proposes to expand the circumstances under which an employee is entitled to protected leave pursuant to the California Family Rights Act. The bill would eliminate the age and dependency elements from the definition of "child" and expand leave for an employee's seriously ill parent-in-law, grandparent, sibling, grandchild, or domestic partner.
AB 1043. This bill proposes to make void and unenforceable the following clauses contained in any policies (including job applications, employment agreements, and employment handbooks), if imposed as a condition of employment: (1) Choice of law clause that selects a state's law other than California to govern an employment dispute; (2) Venue-selection clause that selects a venue outside of California for an employee to bring an employment claim; or (3) Forum-selection clause that selects a forum outside of California for an employee to bring an employment claim.
AB 1045. This bill would require the Occupational Safety and Health Standards Board to adopt standards to protect workers from being exposed to excessive heat indoors.
AB 1707. This bill would require employers to maintain employment records for three years after termination of an employee and to provide inspection and copies within a 21-day period to current and former employees, or their representatives, and would authorize those employees to bring a civil action against and to recover a $750 penalty from an employer for the failure to do so.
SB 549. This bill proposes a new law prohibiting an employee from being discharged, disciplined, or in any manner discriminated against for inquiring about, requesting, or taking up to four days of bereavement leave upon the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner.
SB 622. This bill would prohibit willful misclassification of employees as independent contractors and impose civil penalties for those persons or employers who violate the bill.
SB 836. This bill would include "familial status" as an additional basis upon which the right to seek, obtain, and hold employment cannot be denied.
SB 942. This workers' compensation bill has been significantly modified to provide that, if an injury causes permanent partial disability and the injured employee does not return to work for the employer within 60 days after the disability becomes permanent and stationary, the employee shall be entitled to receive a supplemental job displacement benefit, and would revise the amounts of benefits an injured employee would be eligible to receive. An employer shall not be liable for supplemental job displacement benefits if, within 60 days of the disability becoming permanent and stationary, the employer offers the injured employee regular work or modified work.
II.
Agency Update
Sexual Harassment Training Regulations Take Effect.
The Fair Employment and Housing Commission's ("FEHC") sexual harassment training regulations took effect on August 17, 2007. The text of the final regulations is found here.
Labor Commissioner Issues Opinion Letter On Security Guard Training.
In its first 2007 Published Opinion Letter, the California Labor Commissioner declared that, in the circumstances provided to the Commissioner, private security companies who offer mandated security officer training (to become state-qualified security guards) prior to employment are not required to compensate the trainees for time spent in the training program. DLSE Opinion Letter 2007.08.29.
III.
Judicial Update
For WARN Act Purposes, Construction Workers' "Site of Employment" Is The Actual Work Site.
The Ninth Circuit held that, for the purposes of the federal Worker Adjustment and Retraining Notification Act ("WARN") regulations, the "site of employment" for construction workers is the actual worksite and not the company headquarters. Thus, when 50 or more laid-off construction employees did not work at a "single site of employment," the lay-offs were not covered by the WARN Act. Bader v. Northern Line Layers, Inc., 9th Cir. Case No. 05-36012 (September 10, 2007).
Ninth Circuit Upholds Termination of Police Officer With Online Sex Business.
The Ninth Circuit upheld the termination of a police officer who was terminated after the police department discovered that he had a website business with sexually explicit photos and videos of his wife, other women, and him. The court noted that the website had a negative impact on and caused disrespect to the police department. The Ninth Circuit found that the officer did not establish that his website business constituted free speech and the department/employer appropriately relied on its finding of a reasonable prediction of disruption. Dible v. Chandler, 9th Cir. Case No. 05-16577 (September 5, 2007).
19-Day Delay In Reporting Harassment Did Not Support A Bar To Recovery.
The Ninth Circuit held that it was not a defense under federal law for an employer to argue that the employee delayed 19 days before lodging an internal complaint of sexual harassment. The court reasoned that the reporting delay was minor, not unreasonable, and did not support an argument that the employee's action claim should be barred because she failed to take advantage of any preventative or corrective opportunities. Craig v. M&O Agencies, Inc., 9th Cir. Case No. 05-16427 (August 9, 2007).
Discrimination Claim Upheld When Employee Denied Service Credit for Pre-PDA Leave.
The Ninth Circuit upheld summary judgment in favor of an employee who sued on the ground that she was discriminated against under Title VII when denied service credit for pregnancy leave taken before the Pregnancy Disability Act went into effect. Hulteen v. AT&T Corp., 9th Cir. Case No. 04-16087 (August 17, 2007).
Federal District Court Stops Implementation of DHS "No Match" Regs.
The Department of Homeland Security ("DHS") "no match" regulations that were scheduled to go into effect on September 14, 2007, were subject of an application for a temporary restraining order presented to the United States District Court, Northern District of California. That court granted the order halting implementation of the regulations and stopping the Social Security Administration ("SSA") from sending out letters based on the new regulations. The plaintiffs, consisting of unions and immigrant rights groups, argued that the DHS regulations go beyond the authority provided to the DHS and SSA by statute and are inconsistent with those statutes. The hearing on the issue of extending the temporary order is set for October 1, 2007. AFL-CIO v. Chernoff, N.D. Cal. Case No. 07-4472 (August 31, 2007).
California Supreme Court Declines To Enforce Class Action Waiver.
The California Supreme Court in a divided opinion has held that an arbitration agreement that prohibits class actions for overtime will not be enforceable if arbitration of disputes as a class action would be a significantly more effective way of vindicating employee rights than individual arbitration. The factors for a court to consider in determining if it will enforce such a waiver include the amount of possible recovery, the potential for retaliation against current employees, employees' lack of knowledge about their rights, and other similar obstacles. Gentry v. Superior Court of Los Angeles, Cal.Sup.Ct. Case No. S141502 (August 30, 2007).
California Supreme Court Allows Deductions for Expenses In Incentive Compensation Plans.
The California Supreme Court in another divided opinion held that when California employers calculate their incentive compensation plans and the profits upon which they are based, they may factor in otherwise impermissible deductions for business expenses, such as workers' compensation costs, cash shortages, tort claims by non-employees, etc. The court reasoned that such plans are used as supplemental income and reward employees above and beyond their regular wages for work performed. Prachasaisorde v. Ralph's Grocery Co., Cal.Sup.Ct. Case No. S128576 (August 23, 2007).
Court Holds That Burden of Proof In Disability Case Is on Employee.
The California Supreme Court held that employees bear the burden to prove that they can perform the essential functions of their job, with or without a reasonable accommodation, in establishing a discrimination claim under the Fair Employment and Housing Act; it is not the employer's burden. Green v. State California, Cal.Sup.Ct. Case No. S137770 (August 23, 2007).
FedEx Drivers Are Employees Subject to Expense Reimbursement.
The Court of Appeal addressed a class action brought by drivers for FedEx seeking payment of unreimbursed business expenses. The court held that the drivers were not independent contractors, but employees, and entitled to reimbursement for expenses. Estrada v. FedEx Ground Package System, Inc., Cal.App.Ct. (2d Dist.) Case No. B189031 (August 13, 2007).
Claims Adjusters Were Misclassified as Exempt.
The Court of Appeal held that insurance claims adjusters who brought a class action for overtime pay, arguing that they were misclassified as exempt, were in fact nonexempt employees entitled to overtime. Harris v. Superior Court of Los Angeles, Cal.App.Ct. (2d Dist.) Case No. B195121 (August 16, 2007).
This update was written by Margaret C. Bell in the San Diego office of Gordon & Rees LLP. Portions of this article can also be found in The Resource newsletter published by the San Diego Society for Human Resource Management (www.sdshrm.org) where Ms. Bell serves on its Board of Directors as Vice President, Legislation.
Contacts:
San Francisco - Michael Bruno
Los Angeles - Stephen Ronk
San Diego - Jim McMullen
Portland - Christopher Hawk
Houston - Terrence Robinson
New York - Mercedes Colwin
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