I.
Legislative Update

State/Local

San Francisco Adopts Paid Sick Leave
Effective February 5, 2007, all employees located within the City and County of San Francisco must be provided with paid sick leave. The law provides that employees must accrue one hour of paid sick leave for every 30 hours they work. For businesses with fewer than 10 employees, the sick leave accrual caps at 40 hours at which time no more sick leave accrues. For all other employers, the sick leave accrual caps at 72 hours. Employees hired after February 5, 2007, will start to accrue paid sick leave after 90 days of employment. Paid sick leave can be used for the illness of the employee or a family member. Accrued but unused sick leave does not have to be paid upon termination. Notice of this new law must be posted in the workplace. San Francisco Administrative Code, Chapter 12W.

II.
Agency Update

Two sets of California state regulations are still awaiting approval:

• The Fair Employment and Housing Commission ("FEHC") regulations on mandatory sexual harassment training, originally expected to be approved on February 14, 2007, will go through some additional revisions and public comment. The regulations in their current form are located on the web at www.fehc.ca.gov.
• The California Department of Industrial Relations, Division of Labor Standards Enforcement ("DLSE") has proposed regulations on travel expense reimbursement, which are currently proceeding through a public comment period. The regulations in their current proposed form are located at www.dir.ca.gov.

The U.S. DOL Issues Bulletin on Computer Employees Professional Exemption
The U.S. Department of Labor ("DOL") has issued a Field Assistance Bulletin Memorandum on the Computer Employees Professional Exemption to provide guidance regarding the minimum wage and overtime exemption available for certain computer employees, including computer systems analysts, computer programmers, software engineers, and other similarly skilled computer workers, under the Fair Labor Standards Act ("FLSA").

DOL Announced Final Rule on Unemployment Requirements
The DOL has issued a final rule stating that states may not award unemployment compensation to an individual unless that individual is able to work and available for work. States may also require that the individual actively be seeking work.

WHD Issues More Wage and Hour Opinion Letters
The Wage and Hour Division of the United States Department of Labor ("WHD") has issued two new opinion letters responding to inquires about wage and hour issues under the federal FLSA.

• Do copy editors and senior copy editors qualify as administratively exempt employees? No. The WHD reviewed the position of copy editors of a direct marketing firm who review and edit materials used for marketing and promoting books to book club members. Among other things, the copy editors perform editing, formatting, and style corrections, check adherence to legal requirements for trademarks and copyrights, and ensure compliance with postal rules and scanning standards. They organize work priority to meet deadlines and make decisions on workflow. The WHD found that the work performed by these editors is not directly related to the management of general business operations of the employer or the employer's customers. It also found that the editors did not routinely use discretion and independent judgment with respect to matters of significance. Instead, their tasks tended to involve technical steps relating to the production of the employer's marketing materials.



• Are Location Managers employed in the motion picture industry subject to the administrative exemption? In this case, yes. Location Managers typically select a location for filming (subject to approval), negotiate the site's rental, contract for utilities, apply for governmental services and permits, create and enforce rules relating to the site, and act as a liaison between the production company and local property owner. The WHD found that such Location Managers, who are paid more than the minimum requirement, engaged in duties which directly related to management or general business operations and exercised discretion and independent judgment with respect to matters of significance.

III.
Judicial Update

Ninth Circuit Issues Superseding Opinion on Computer Privacy Case
Last August, the Ninth Circuit decided a case in which an employer had turned over to the FBI an employee's workplace computer containing images of child pornography that the employee had accessed at work. The question before the court was whether the government, in a criminal proceeding against the employee, had engaged in an inappropriate search and seizure of private information. The court held in its first opinion that the employee did not have a reasonable expectation of privacy in his workplace computer because the employer owned it and the employee knew that the employer monitored computer usage. The Ninth Circuit in a panel decision has now modified its opinion and ruled that the employee did have a reasonable expectation of privacy in his private office and any search of that space and the items in that space must comply with the Fourth Amendment search and seizure requirements. However, the Ninth Circuit also found that the employer could provide the consent required to search the employee's computer, because it is the type of workplace property that remains within the control of the employer. U.S. v. Ziegler, 9th Cir. Case No. 05-30177 (January 30, 2007), withdrawing and superseding the August 8, 2006 9th Circuit opinion.

Ninth Circuit Upholds Largest Class Certification
The Ninth Circuit considered whether it was proper to certify a class action under Title VII of the 1964 Civil Rights Act for sex discrimination, which would be the largest class certification in history, brought against Wal-Mart by female employees. The plaintiffs allege that 1.5 million female employees were paid less and received fewer promotions than men and that Wal-Mart's personnel and management structure fosters and facilitates gender stereotyping and discrimination across the country. The court reviewed the federal requirements for class certification (namely, that there be commonality of the issues among the class, that the representatives' claims be typical of the class claims, and that there is adequate and fair representation of the class) and found class certification was appropriate, relying in part on the fact that the claims seek predominantly injunctive and declaratory relief, despite also seeking clams for back pay and punitive damages. Dukes v. Wal-Mart, Inc., 9th Cir. Case Nos. 04-16688, 04-16720 (February 6, 2007).

The Class-Of-One Theory Under Equal Protections Law Does Not Extend to Employment Decisions
The Ninth Circuit decided a case brought by a public employee against his public employer for violations of equal protection and substantive due process. The court addressed an issue of first impression: whether a class-of-one theory can be extended to public employment decisions. A class-of-one theory involves alleges that the plaintiff has been intentionally treated by the government differently from others similarly situated and that no rational basis exists for the difference in treatment. The court held that this theory does not extend to public employment decisions. Engquist v. Oregon Department of Agriculture, 9th Cir. Case Nos. 05-35170, 05-35263 (February 8, 2007).

Ninth Circuit Finds Hearing Disparity Is Not Covered Disability
The Ninth Circuit upheld summary judgment for a public employer sued for disability discrimination under the Rehabilitation Act. The employee claimed she was unlawfully terminated when a company-designated physician found that she had a disparity between her two ears' ability to localize sound and thus determined that she was not medically qualified to perform the essential functions of her job. Applying federal standards, the court held that the stated diagnosis did not rise to the level of a disability that substantially limits a major life activity and no support existed for the argument that the employer had regarded the employee as having a disability. Walton v. U.S. Marshals Service, 9th Cir. Case No. 05-17308 (February 9, 2007).

D.C. Circuit Finds U.S. Labor Laws Apply to Tribes
The U.S. Court of Appeals for the District of Columbia recently held that the federal labor laws apply to the San Manuel Indian Bingo and Casino located in California. In an appeal from a labor matter originally brought before the National Labor Relations Board ("NLRB"), the court found that the tribe, which had long enjoyed immunity from federal labor laws as a sovereign government, is subject to the federal labor laws when operating its casino as a commercial enterprise. The court noted that the vast majority of the casino's employees and customers are not members of the tribe. San Manuel Indian Bingo & Casino v. NLRB, D.C. Cir., Case No. 05-1392 (February 9, 2007).

Employee Assault and Battery Claims Are Not Preempted By Federal Labor Law
The Ninth Circuit reviewed a case in which six employees of the Circus Circus Casino in Las Vegas alleged that they were injured by casino security guards when they broke up a union meeting held during nonworking hours on company property. The issue before the court was whether these claims are preempted by the federal labor laws so that the employees had to first proceed through the required grievance/arbitration process. The court found that, because the court did not have to consult the collective bargaining agreement to determine the assault and battery claims, those claims are not preempted, and the court can decide them. Ward v. Circus Circus Casinos Inc., 9th Cir. Case No. 04-17098 (January 10, 2007).

Ninth Circuit Upholds Military Leave Verdict
The Ninth Circuit upheld a jury verdict finding that the City of San Diego constructively discharged a reserve officer and retaliated against him for taking military leave, in violation of the Uniformed Services Employment and Reemployment Rights Act ("USERRA"). In the case, the City had denied the employee promotions, assigned him undesirable work, subjected him to disciplinary proceedings, given him a below standard performance evaluation, and suspended him, all after the employee had taken several tours of duty. Although arguments existed for both sides, the Ninth Circuit found that "substantial evidence" under the applicable appellate standard supported the verdict in favor of the employee. Wallace v. City of San Diego, 9th Cir. No. 03-56552 (February 12, 2007).

Cal-OSHA Citation Against General Contractor Does Not Require Lack Of Diligence
The California Court of Appeal addressed a general (as opposed to serious) citation assessed against a general contractor for a subcontractor's trenching violation about which the general contractor claimed it did not know and could not have discovered through reasonable diligence. The court ruled that, in citing the general contractor for general OSHA violations of its subcontractor, Cal-OSHA was not required to show the general contractor's lack of reasonable diligence as a part of its prima facie case. Overaa Construction v. Cal OSHA, Cal. Ct. App. (3rd Dist.) Case No. C051245 (January 31, 2007).

Court Strikes Claim Based on Internal Grievance Proceeding
The Court of Appeal reviewed an appeal brought by an employee of UC Davis against the manager who denied his administrative grievance alleging harassment. The employee claimed the manager had violated his civil rights in that grievance proceeding. In response to this claim, the manager filed an anti-SLAPP motion to strike the claim. An anti-SLAPP motion is a litigation procedure where a defendant seeks to strike claims arising from acts performed in furtherance of the defendant's rights of public petition or free speech, which can include statements made during judicial or official proceedings. The trial court denied the motion, but the court of appeal reversed finding that the manager's comments and conduct during the proceeding were protected speech falling under the anti-SLAPP law and that the manager, acting in an official proceeding, deserves the protection of that law. The court also found that there was no probability that the employee would prevail on the merits of the subject claim. The manager was awarded her attorney's fees for prevailing on her anti-SLAPP motion. Vergos v. McNeal, Cal. Ct. App. (3rd Dist.) Case No. C01469 (January 23, 2007).

Court Upholds Retaliation Findings Against Employer and Individuals
The Court of Appeal reviewed a verdict in favor of an employee who brought a lawsuit for sexual orientation discrimination and retaliation. The court held, among numerous issues raised, that written warnings, physical intimidation, and exclusion from meetings could rise to the level of adverse employment actions if they have a detrimental and substantial effect on the employee's employment, a required element of a discrimination or retaliation claim. The court also specifically held that individuals can be liable for retaliation under the Fair Employment and Housing Act. Jones v. The Lodge at Torrey Pines Partnership, Cal. Ct. App. (4th Dist.) Case No. 046600 (February 5, 2007).