I.
Legislative Update

National

In its 110th Session, our federal Congress will be focusing on the following employment-related bills:

• Immigration Reform - Electronic Verification: Last year, the House and Senate failed to reconcile two varying immigration reform bills passed in each chamber. The main provision contained in both bills which will affect Human Resource professionals is the mandate for electronic verification of employment eligibility. Congress continues to address immigration reform in this session and will be re-visiting the issues relating to electronic verification.
• Leave Laws: Two bills were recently introduced which propose the following:

  -H.B.1582 and S.910, the proposed "Healthy Families Act," which failed passage in 2005, proposes to require all employers in the United States who 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 20 hours per week would receive a pro-rata percentage of that paid leave.
  H.B.1369 proposes to expand the Family and Medical Leave Act to apply to all employers with 25 or more employees, as opposed to the current cutoff of 50 or more employees, among other expansion provisions.

• Employee Representation: H.B. 800, referred to as the Employee Free Choice Act, proposes to change the National Labor Relations Act ("NLRA") in connection with how employees decide whether or not to join a union. H.B. 800 proposes to allow unions to bypass private ballot elections in favor of a more open "card check" process that does not involve secret balloting. This bill also will require management-labor disputes on first contracts to be referred to arbitration after 90 days of collective bargaining and 30 days of mediation. H.B. 800 has passed the House of Representative and is now before the Senate. President Bush has indicated that he will veto this bill.
• Genetic Information Nondiscrimination: S. 358 and H.R. 493 are pending bills that would make it unlawful for an employer to discriminate against an employee based on the employee's, or his/her family member's, genetic information. Subject to narrow exceptions, the bills forbid employers from requesting, requiring, or purchasing genetic information.

State

A.B. 537: This Assembly bill, which was introduced on February 27, 2007, proposes to expand the circumstances under which an employee is entitled to protected leave pursuant to the California Family Rights Act ("CFRA") by (1) eliminating the age and dependency elements from the definition of "child," thereby permitting an employee to take protected leave to care for his or her independent adult child suffering from a serious health condition, (2) expanding the definition of "parent" to include an employee's parent-in-law, and (3) also permitting an employee to take leave to care for a seriously ill grandparent, sibling, grandchild, or domestic partner. This bill has been referred to the Committee on Labor and Employment.

Other state bills introduced this year propose the following: yearly automatic adjustments in the minimum wage (A.B. 71); required meal periods for public lifeguards and stage assistants (A.B. 124); requiring wage record retention for ten years (A.B. 435); allowing for individual-based alternative work weeks (A.B. 510); elimination of the requirement for immediate payment of wages upon discharge of temporary workers (A.B. 592, A.B. 1425); requiring postings to be in plain English (A.B. 613); voiding employment contracts requiring a forum or choice of law other than California (A.B. 1043); and requiring employers to maintain employment records for a specified time and to provide access for inspection and copies of those records within a specified time (A.B. 1707).

II.
Agency Update

Department of Labor Opinion Letters

The Wage and Hour Division of the United States Department of Labor has issued numerous Opinion Letters interpreting the Fair Labor Standards Act ("FLSA"), which are briefly identified below and may be found at www.dol.gov/esa/whd/opinion/opinion.htm.

• Timeshare salespeople at resort properties did not qualify as exempt under the outside sales exemption.
• Sales associates working for a multi-state real estate and construction company, who are selling homes to be built and are based at the company offices or in trailers, did qualify as exempt outside sale employees.
• Sales employees selling newly-constructed homes, working out of temporary sales facilities, did qualify as exempt outside sales employees.
• Radiology technologists did not qualify as overtime exempt under the professional exemption.
• A superintendent for an environmental engineering and consulting company that performs construction projects on governmental sites was found to qualify for the executive exemption.
• School Resource Officers employed at an independent school district qualified for the administrative exemption under the FLSA.
• Case Managers who meet and work with consumers with disabilities did not quality for the administrative exemption.
• An employer may deduct, in full-day increments, from the pay or accrued leave time of an employee who is exempt under the FLSA, for leave taken under a state leave act allowing for leave for school activities or a child's or elderly relative's medical appointments. The employer also may deduct from the employee's accrued leave time for leave taken under the state leave act without affecting the employee's exempt status so long as the employee receives his or her salary.

FEHC Revises Sexual Harassment Training Regulations ... Again
The Fair Employment and Housing Commission did not adopt the third set of proposed sexual harassment regulations and instead has revised them a fourth time, subject to approval. The main revisions pertain to the definitions of "effective interactive training" and the proper "trainers or educators." See www.fehc.ca.gov.

III.
Judicial Update

Termination of Employee on Leave Upheld When It Would have Occurred Regardless of Leave Status
The federal Ninth Circuit addressed a case alleging violations of the Family and Medical Leave Act ("FMLA") by an employee with a bipolar condition who was put on a performance plan based on her attitude and general disposition. When this employee expressed suicidal thoughts, the employer told her to go to the hospital and she was placed on a FMLA leave. After further investigation, the employer decided that, due to recent outbursts, they would terminate her. The jury found for the employer on the FMLA claim, which was upheld by the Ninth Circuit, because the employer would have terminated the employee regardless of her leave status. The Ninth Circuit also held that conduct resulting from the disability (like the outbursts) is a part of the disability under Washington law and the jury should have been instructed in that regard. Gambini v. Total Renal Care, Inc., 9th Cir. Case No. 05-35209 (March 8, 2007).

State Discrimination Law is Not Preempted by ICRA
The Ninth Circuit addressed a case in which an employer terminated a foreign employee when his visa expired, even though the employee indicated that he would be able to resolve his visa issues within a short period of time. The employee brought a lawsuit arguing that the employer was bound by contract to only discharge him for good cause and bound by the Fair Employment and Housing Act to not discharge him because of his national origin. The employer argued that the Immigration Reform and Control Act of 1986 ("ICRA"), prohibiting employers from employing unauthorized aliens, preempted California state law. The employee prevailed at trial and the Ninth Circuit upheld that verdict, stating that the ICRA does not preempt state law because the employer can comply with both, by placing the employee on an unpaid leave while he resolves the visa issue. The jury had specifically found that the employer wanted to terminate the employee without cause and used the expiration of his visa as a rationale even though it had agreed to assist a co-worker obtain his new visa. Incalza v. Fendi North America, Inc., 9th Cir. Case No. 04-57119 (March 6, 2007).

ICRA Does Not Affect Standing to Sue Under State Prevailing Wage Laws
The Court of Appeal addressed a case filed by undocumented workers for violations of the state prevailing wage laws applicable to public works projects. The trial court held that these claims by undocumented workers were precluded by ICRA, despite state California Labor Code section 1171.5 which states that, when an employer hires an undocumented worker, the employer bears the burden of complying with state wage and hour laws. The Court of Appeal reversed and held that ICRA does not preempt the state law and does not preclude the workers from having standing to sue for prevailing wage violations. Reyes v. Van Elk, Ltd., Cal. App. Ct. (2d Dist.) Case No. B182068 (March 14, 2007).

Court Upholds Discharge for Sleeping on the Job
The Court of Appeal upheld the dismissal of a public employee who was caught sleeping on the job. The employee had appealed the decision to the Los Angeles City Board of Civil Service Commissioners and then to the court. The trial court found that the employee waived his right to a Skelly hearing and that he was provided with due process; however, the trial court found that discharge was an excessive penalty. The Court of Appeal upheld all aspects of the trial court's decision except that it reversed the finding of an excessive penalty and upheld the discharge. Flippin v. Los Angeles City Board of Civil Service, Cal. App. Ct. (2d Dist.) Case No. B187388 (March 1, 2007).

Wage Order 16 is not Invalid
The Court of Appeal reversed a trial court's decision that California Wage Order 16 was invalid and found that it was properly published, had a sufficient statement of its reason and was not unreasonable, arbitrary, capricious, or unfair due to the use of the term "given craft." Small v. Superior Court, Cal. App. Ct. (4th Dist.) Case No. G037041 (February 28, 2007).

Unequal Pay Not Supported by Mixed Unit
The Court of Appeal addressed a class action brought by female employees for gender-based wage discrimination under federal and state law, alleging that they worked in a primarily female unit of attorneys working through an employment agency who were paid less than a primarily male unit of regularly employed attorneys. The Court of Appeal upheld summary judgment in favor of the employer finding that it was not appropriate to make a comparison of one unit of employees consisting of both male and female with another unit which also consists of both male and females. It also found that the employer had a legitimate business reason (namely, cost-saving) for the difference in pay and no evidence supported a finding that gender was the actual reason. Hall v. County of Los Angeles, Cal. App. Ct. (2d Dist.) Case No. B186224 (February 22, 2007).

Employee Must Fully Exhaust Administrative Remedies Or Findings Are Binding
The Court of Appeal held that an employee must fully exhaust her administrative remedies, including any appeals, or the administrative findings will be binding on future proceedings. Here, a public employee filed an administrative claim alleging that she was terminated after reporting that a Board member did not have a proper license, but did not request a hearing after receiving notice that the administrative body had made an adverse decision against her. She then filed a civil case attacking the decision. The Court of Appeal affirmed the trial court's determination that the unchallenged adverse findings barred her subsequent tort claim under principles of res judicata. State Board of Chiropractic Examiners v. Superior Court, Cal. App. Ct. (3d Dist.) Case No. C052554 (February 28, 2007).

Court of Appeal Upholds Denial of Contract Teacher Status
The Court of Appeal held that a community college teacher's hours did not satisfy the required number of hours to meet the legal definition of a tenured teacher subject to different termination standards under the Education Code, because his actual teaching hours equal did not equal at least 60% of those recognized by the community college for a full-time position. Womak v. San Francisco Community College Dist., Cal. App. Ct. (1st Dist.) Case No. A112564 (January 24, 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 - James McMullen