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DFEH To Promulgate Sexual Harassment Training Regs

Jackson Lewis has the scoop, here.

AB 1825, the law that requires employers with more than 50 employees to train their managers on sexual harassment, is now in effect. But with the little guidance it gets, I’ve had a lot of questions. Who can do the training? Can you do the training? What does it have to cover? Who is a supervisor according to this law? Etc. etc.

Hopefully these regulations will provide some guidance. According to the article linked above, California licensed attorneys can do the training (all-righty then). The trainer should be able to cover:

(A) what is unlawful harassment;
(B) how to intervene when harassing behavior occurs in the workplace;
(C) how to report harassment complaints;
(D) how to respond to a harassment complaint;
(E) how to investigate harassment complaints and an employer's obligation to do so;
(F) the illegality of retaliation for filing a harassment complaint and how to prevent retaliation from occurring when an employee has filed a harassment complaint; and
(G) the employer's anti-harassment policy.

Is California "anti-business"?

You've heard a lot about California being "anti-business" and its laws and policies being hostile to employers. It's an article of faith among some of my colleagues. Apparently, ho

• California does in fact lose business and jobs because of relocation, but the effect on employment is negligible. In any year from 1993 to 2002, the net job loss from business relocation was never higher than one-tenth of 1 percent of the total number of jobs. . .
  
  
• Employment change is primarily driven not by interstate relocation but by the expansion and contraction of existing businesses and by the births of new businesses and the deaths of existing ones. . .
  
  
• When they do move, businesses are much more likely to move locally than across state boundaires. . .

Also, not this interesting factoid: "Those who have argued that California's business climate has pushed businesses out of California have rarely relied in empirical evidence of relocation behavior, but rather or surveys that elicited subjective assessments from employers."

In other words, someone is creating a positive-feedback loop that is scaring the crap out of medium and small businesses in the state, driven by a justifiable frustration at complicated regulation. Nonetheless, fear-mongering at the state of things in the world's fifth largest economy is not productive. One wonders whether the rust-belt states are claiming the same problems as they lose population in droves to the sun-belt. California is a great place to do business, especially relative to where else you can go, even if sub-optimal in all aspects.

You can read the entire report here in the California Economic Policy Journal.

More on Wal-Mart

More on Wal-Mart.

Nathan Newman bombards Kevin Drum and Ezra Klein for widening the context of the Wal-Mart dispute.

Employers shouldn't be excused for completely rotten, immoral activities just because a better policy would make compliance with the law easier. This is bleeding heart liberalism applied to the largest corporation on earth, as if Ezra is excusing some kid caught purse snatching with the excuse that society had failed to provide better economic alternatives to a life of crime, so it's really society's fault that the victims lost their property.

I've talked to people about this, and it's not clear what they are (were going to be?) doing is discriminatory. Even if it discourages "unhealthy" applicants (not a protected class as long as they aren't perceived as such), as long as they aren't trying to keep disabled people out, it's not illegal. Under disparate impact cases, there is a so-called "interest" defense (why you don't see WASPs bring class actions against strawberry farms). If it's just that people don't want that kind of job, it's basically ok. It depends on the intent.

And Newman may be right that allowing this potential violation in order to cure a health care issue isn't the law, but at least they aren't simply doing it to pad their pockets. Pure motive or not, they are trying to address an important social issue. That should be deemed a step in the right direction for a Wal-Mart antagonista.

Gattuso v. Harte-Hanks Shoppers, Inc.

The Second District has held that Labor Code section 2802 does not preclude employers from paying increased salaries or commissions in lieu of reimbursement for actual expenses.

The Wal-Mart Memo: Does It Break The Law?

Wal-Mart has managed to create another PR nightmare for itself. This week, an internal memo (p.14) suggesting that Wal-Mart discourage unhealthy people from applying for jobs has raised hackles from the usual anti-Wal-Mart suspects. But it might also raise a lawsuit.

If you're reading this blawg, you're probably aware that the ADA and (in California) the FEHA prevent discriminatory hiring practices against those with disabilities.

Nothing in the memo suggests that this is anything but a proposal, and it probably wasn't vetted by the company's lawyers. Even still, nothing in it is per se discriminatory. Instead of trying to exclude the disabled, instead it's trying to attract health-conscious workers.

I'm not an ADA jock. I don't know enough to say for certain whether or not this all on its own violates the ADA, but my sense is that it doesn't, and, if it does, it's bad policy. Given the bovine nature of America, the country's largest employer should do something to encourage more physical activity!

The SEIU's spokesperson told the WSJ (sub. req'd) that

"When you add physical requirements to jobs that don't need them, you begin to weed out a whole pool of people such as the elderly, the obese, people with pre-existing medical conditions," says Andrew Stern, president of the Service Employees International Union, which represents 1.8 million workers, including health-care workers, janitors and security guards. "I think this memo steps over the line of what's legal," he adds.

There is an argument that they might be unnecessarily adding tasks to job descriptions. Here's where I'd ask for some reader feedback. To what extend does the FEHA or ADA mandate than an employer create job descriptions? Can the ADA stop Wal-Mart from making cashiers collect carts? If so, what else can't they do? Do employer have to create job descriptions that are always carefully calibrated according to potential disability impact?

2005 Legislative Summary [Draft]

Only a few employment-related bills made it through the legislative process this year. This is mostly a reflection of the split government. Remember, to an outside observer, California politics is polarized on a coprorate/union axis with other interest groups not holding nearly as much sway.

AB 1093 allows for final "termination pay" to be made by direct deposit to a bank with a location in California, even if not headquartered here. It also clarifies some aspects of a computer programmer's exemption from overtime rules. Nothing too big here.

AB 1311 harmonizes service rules between DLSE hearings and civil suits. No biggie either.

SB 101 is discussed below--only put the last 4 digits of a social on a pay stub!

Sb 184 ups a talent agencies bond requirement to $50,000. Hmph.

The gridlock in Sacramento has succeeded in doing one thing: limiting the amount of topics for people like me to speak about to potential clients in the spring. There really isn't that much change in the law this year. I think that's a good thing--so we can let all of the rapid change in the past few years sink in.

2005 -- that's a wrap. I'll keep my ears open for a veto overried on minimum wages, but otherwise, 2005 legislative updates are done.

UPDATE: Littler's summary is here.

Legislative Update

AB 48 was VETOED.
AB 57 was VETOED.
AB 169 was VETOED.
AB 222 did not pass in committee.
AB 364 did not pass in committee.
AB 391 was VETOED.
AB 419 died in committee.
AB 474 did not pass in committee.
AB 510 did not pass in committee.
AB 553 did not pass in committee.
AB 640 did not pass in committee.
AB 673 died in committee.
AB 674 died in committee.
AB 775 died in Senate committee.
AB 822 died in committee.
AB 875 was VETOED.
AB 879 was VETOED.
AB 904 did not pass in committee.
AB 985 was VETOED.
AB 1012 died in committee.
AB 1093 passed and is law.
AB 1255 died in the hopper.
AB 1311 passed and is law.
AB 1626 has been transformed to a non-employment issue.
AB 1709 did not pass in committee.
SB 101 passed and is law.
SB 174 was VETOED.
SB 184 passed and is law.
SB 285 died in committee.
SB 862 died in commitee.
SB 940 was VETOED.

That's a wrap for 2005. Arnold terminated all but a few bills, which I will review above.

Some Initial Thoughts On The Jury System

My experience as a juror was traumatic. Not because the seats in the jury box must have been designed by a cabal of chiropractors to maximize business; not because it took two weeks of my life; and not because most of the subject matter was drop-dead boring.

It was traumatic because during deliberations, roughly half of my fellow jurors simply ignored the evidence and the instructions. And it's not because I disagreed with the result that we arrived at. I simply disagreed with the disdainful, prejudicial manner that some of the other jurors had.

I pray that I never have my fate or the fate of someone I care about decided by such a group. I don't have any proof, for example, that some of those who refused to deliberate in good faith were simply trying to get home after two long weeks, but I got it straight from the horse's mouth from some of them that they simply "didn't like" the plaintiff or thought that because he didn't do absolutely everything perfectly that he deserved no reward--nothing that had anything to do with the law or the facts.

The case deserved a defense verdict, in my opinion, but not because the of the smear on the plaintiff by the defense, not because there are "frivolous" lawsuits out there and we should punish the system (there was enough juice in this one on day one to leave any notion of frivolous far behind), or anything else that was irrelevant to the events in question.

As a defense attorney, I have to feel emboldened. As a citizen, I have to be scared.

A lawyer as a juror.

I have been on a jury for almost two weeks now. It's been an educational process that I will have a lot to say about once I'm relieved of my duty to hush up. I apologize for the lack of posts. As you can imagine, I've been occupied.

Editorial Policy on Comments

Comment spam has become overwhelming. I hate to do this, but I feel that I have to require that only those who create a blogger account can now post comments. If you have something important to say and don't feel like creating a blogger account, feel free to e-mail me.

My excuse this week.

So, first I had a stomach ailment, then a nasssty headcold. Now, tomorrow, I have jury duty. What a week.

SB 101 Analysis

Purpose:

SB 101 provides clean-up language to SB 1618, which was
passed last year. SB 1618 was enacted to help reduce the
likelihood of identity theft by requiring that by January
1, 2008, all employers must only use the last four digits
or less of an employee's social security number or
otherwise use an existing employee identification number
other than a social security number when providing
employees with an itemized statement of earnings.


Analysis:

Existing law requires an employer to furnish each employee
with an accurate itemized statement showing, among other
things, the name of the employee and his or her social
security number, except that, by January 1, 2008, existing
law requires the employer to include no more than the last
4 digits of the employee's social security number or an
existing employee identification number other than a social
security number on any check provided to an employee.

This Bill would clarify two issues raised by language in SB
1618. First, it strikes the word existing as it relates to
employee identification numbers. Assuming most employers
are not currently using alternative identification numbers
to pay their employees, they must be allowed to establish
new employee identification numbers to implement the
provisions of the bill.

Legislative Track Update

AB 48 is on the Governor's desk.
AB 640 is dead.
AB 875 is on the Governor's desk.
AB 879 is on the Governor's desk.

SB 101 is law; it amends LC 226 re: pay stubs.
(summary to follow)

SB 174 is on the Governor's desk.
SB 285 is dead.
SB 862 is dead.

SB 940 has been VETOED by the Governor (didn't pass with a 2/3ds majority in either house)

Hooters Employee Handbook

After drafting a number of employee handbooks, I (serioulsy) often wondered how I would tackle a client like hooters. Well, here's their handbook, so I guess I know now.

Locker Suspended

The San Francisco Chronicle has this article:

Miles Locker has been suspended from his job in the Department of Industrial Relations for taking part in an informal "educational'' panel hosted by the San Francisco Bar Association's Barristers Club.

The panel's topic: "Meal and Rest Period Litigation.''

So, does this violate section 96(k)?

Ross v. Ragingwire Telecommunications, Inc.

Guest Blogger: Steven M. Chanley

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Ross v. Ragingwire Telecommunications, Inc.

The Court of Appeal (Third Appellate District) holds that an employer does not violate the FEHA’s prohibition against disability discrimination for firing an employee whose pre-employment screening tested positive due to physician-prescribed marijuana smoking. Although the drug use was lawful under California’s Compassionate Use Act of 1996, it remains unlawful under federal law. Nothing in the FEHA requires an employer to tolerate current illegal drug use. Moreover, the California statute “simply permits a person to use marijuana for medicinal purposes in our state without incurring state criminal law sanctions. The initiative says nothing about protecting the employment rights of those who do so.”

Comment: It is difficult not to be sympathetic to the plight of those who must rely legitimately on mind-altering drugs to mitigate their physical pain. However, it seems a non-starter to argue that the employment laws require an accommodation in the form of permitting illegal drug use.

Chamber of Commerce v. Lockyer

Guest blogger: Steven M. Chanley

Chamber of Commerce v. Lockyer (9th Cir.)

The Ninth Circuit Court of Appeals struck down on NLRA preemption grounds a California statute that forbids a recipient of state funding from using any of those funds to promote or deter union organizing. Although somewhat facially neutral, the problem was that, in practice, the statute had a disparate impact on an employer’s right of free speech as to matters falling within the NLRA’s coverage. Accordingly, the statute was found to be preempted under both the Garmon and Machinists preemption doctrines.

Comment: Another example of the NLRA forbidding states from putting their thumb on one side of the scale or the other in matters of unionizing. Isn’t it best just to leave such matters to a well-informed employee electorate, whose personal rights are at stake anyway?

Donald Green v. State of California

Guest Blogger: Steven M. Chanley

Donald Green v. State of California

Court of Appeal in the Fourth District holds that it is the defendant’s burden to prove plaintiff’s incapacity as an affirmative defense and not plaintiff’s burden to prove his capacity to perform as part of his prima facie case of disability discrimination under the FEHA. The holding specifically disapproves the Judicial Council jury instructions on the issue, as well as Brundage v. Hahn, both of which place the burden on the plaintiff as part of his prima facie case.

Comment: This is another unfortunate case where California law is made to deviate from federal ADA precedent in a way that makes no sense. Being a qualified individual with a disability should be considered a baseline standing requirement, properly placing it within the claimant’s prima facie case. This one is destined for depublication.

Leegin Creative Leather Products v. Diaz

Guest Blogger: Steven M. Chanley

Leegin Creative Leather Products v. Diaz

The employer sued an employee for fraud after a sub rosa investigation captured evidence that the employee displayed physical capabilities that were inconsistent with her temporary total disability claim. The civil suit was filed while the application was still pending before the WCAB and before there had been any administrative finding of fraud. The trial court granted the employee’s anti-SLAPP motion to dismiss.

The Court of Appeal affirmed. The employer did not contest that the employee’s application to the WCAB implicated her right to petition the government for the redress of grievances, and the Court of Appeal determined that, for two reasons, the employer’s Complaint failed to make a prima facie showing sufficient to sustain a judgment in its favor. First, the employer’s forwarding the employee’s application for benefits to its insurer was not evidence of justifiable reliance, according to the Court, because that act was non-discretionary and compelled by law. Second, the Court found that the employer could not show any resulting loss, because any eventual finding of fraud by the WCAB would preclude an award of benefits and an increase in insurance premiums as a matter of law. The Court of Appeal also based its holding on public policy grounds: “Permitting an employer to bring a civil action for fraud against an employee while the workers’ compensation proceeding is pending could have a chilling effect on an employee’s exercise of the right to file a workers’ compensation claim.”

Comment: This is clearly the case of a company’s frustration over a frivolous comp claim trumping its better judgment. As the Court of Appeal points out, adequate remedies exist at the administrative level (where the insurer bears the attorneys’ costs) for dealing with applicant fraud. I’ll bet the civil suit was probably several times costlier than whatever premium increase the employer would feel as a result of the comp claim.

Sorry for no posting.

An unfortunate confluence of work, personal, and family business have kept me very busy in the last two months. I'm hoping everything will be back to normal by September.

Reynolds v. Bement

The California Supreme Court has ruled unanimously that the state's labor laws do not impose personal liability on corporate officers and directors for unpaid wages owed by a corporate employer. This includes unpaid overtime pay based on the erroneous classification of workers as exempt employees [Reynolds v. Bement, et al., Cal. Sup. Ct. No. S115823 (August 11, 2005)].

Jackson Lewis has more, here.

Roberts

Nathan Newman has a first look a t Judge Roberts's labor law record here. (Warning: non-objective commentary follows). Roberts will get through comfortably, I'd bet on it.

Miller v. Department of Corrections

Via George's. I think you've probably all heard about this one. The California Supreme Court says just having an affair in the office can create a hostile work environment. The reason I wanted to post on this is because I think this does change some of the legal advice that we need to actually give, instead of speculating on results.

It just pays to keep relationships out of the workplace for so many reasons.

Also note that for an experimental 30 days, my posts will be cross-posted here.

CLEL joins the dark side!

Over at the California Wage and Hour Weblog, check out this commentary on the recent precedential opinion involving section 226.7 remedies:

We debated whether to mention this DLSE memo, since it has no precedential value in the Superior Court, and, although well-informed defense firms will be using this as an argument to persuade the trial courts to change their minds about Section 226.7 wages, not all defense firms are so informed. But we see now that the dark side blogs are talking about it, so we might as well weigh in.

(Emphasis, as usual, added). And where does that "dark side" link go? Right here to CLEL. First, I resent the value judgment; second, that inappropriately pigeonholes me and my work, my firm and its work into a category that it simply does not fit in.

Ironically, this blog is posted by a firm that "represent[s] employers, and both individuals and classes of employees in litigation concerning discrimination claims, wage and hour claims, and disputes over working conditions. The firm's goal is to bring the workplace of every employer and employee we represent into full compliance with California law." A description that also fits me and my firm.

Since its inception over a year ago, I have always striven to "do my best to give objective, neutral commentary on these issues. This means I won't be championing issues on the side of the plaintiff's bar or the industry side. That's not the point. There are thousands of blogs that amount to an un-edited, narrowly read op-ed page."

To the extent that I have deviated from that, I have been unabashedly critical of many ( for example here, here, here, and here) "pro-employer" decisions, and the "shock and awe" tactics used by big defense firms in their marketing. I have also provided free advice to employees, and been attacked for being too pro-employee in many of the comments above. The irony is killing me. I'm attacked by both sides. Must mean I'm doing something right.

Nevertheless Walsh Skywalker has accused me of joining the dark side.

Signed,
Darth Jonerikus.

Humanscale Is Not A Panacea.

Big firm blast-broadcasts have hailed the recent Jones v. Humanscale Corp. decision as a "major victory in the area of non-competition, choice of law, and arbitration."

It is none of the above. At most, it might provide for an interesting "cf" at the end of a string of citations in a law school textbook. It is most certainly not something that should form the basis of any advice to a client.

First of all, this is a very specific fact pattern. The employer was a New Jersey corporation, and the arbitration agreement required arbitration to occur in New Jersey. That fact alone limits the usefulness of this holding to many in-state only employers.

Second, it's clear that if a normal conflicts analysis was applied, the non-compete agreement could not stand. If the Supreme Court takes this case and affirms the ruling of the Court of Appeal, then we have new law that we can rely on. But I wouldn't bet on that. This ruling basically gives employers the ability to make an end run around California law. As nice as that may be, this just isn't the kind of ruling that stands up for long.

If you want to go out on a limb with this ruling, call another firm. If you want to be safe rather than sorry, and not end up in $600/hr. litigation because your lawyer talked you into being a guinea pig for appellate litigation, call us.

Tellis v. Alaska Airlines, Inc.

Tellis v. Alaska Airlines, Inc.
9th Cir. Case No. 04-35137

Plaintiff's cross-country trip to retrieve family vehicle during his wife's late-stage pregnancy difficulties, and his calling her on the phone during the three and a half days he was away, were not "to care for" his wife under the Family and Medical Leave Act and thus not a protected absence from his employment.

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Well, if I was the Plaintiff, I'd take that one all the way to the Supreme Court. Heh. (=

CLEL Tops 25,000 Hits!

Thanks to all my readers! It's hard to imagine when you start and you get 300 hits a month that you'll get that many in a day. I'm thankful that people read. Please continue to provide feedback so that I can improve!

Head v. Glacier Northwest, Inc.

Head v. Glacier Northwest, Inc.
(9th Cir. Case No. 03-035567)

In employment discrimination action under Americans with Disabilities Act, plaintiff’s own testimony, unsupported by medical or comparative evidence, may suffice to establish triable issue of fact as to whether plaintiff’s ability to engage in a major life activity is impaired.

Comment: Yikes!

Coghlan v. American Seafoods Co.

I would like to preface this case note by saying that I am Norwegian and we don't fire people for not being Norwegian, we fire them for being Swedes! (=

Coghlan v. American Seafoods
(9th Cir. Case No. 03-35314)

The gist: When the same person demotes you that just promoted you have to show why they weren't being racist before.

Plaintiff, who alleged that he was terminated from his employment in commercial fishing by his company’s new owners because he was not of Norwegian birth, was required--to establish prima facie case--to present sufficient evidence to overcome the "same actor inference" of nondiscrimination based on fact that decision to terminate plaintiff was made by same person who had earlier made decisions to hire and promote him. Evidence that employer had, on two occasions, given temporary control of ship to Norwegian-born employee who had less experience than plaintiff was insufficient to overcome inference of nondiscrimination where there was uncontroverted evidence that decision was based on recommendation of non-Norwegian supervisor who felt plaintiff lacked sufficient leadership skills.

Bill Tracking Update

AB 48 - is in the senate, appears headed for passage.
AB 640 - failed passage in the committee, appears dead.
AB 875 - being ameneded in senate
AB 879 - ready for a floor vote in the senate, appears headed for passage

SB 101 - In Assembly, headed for a floor vote and headed for passage.
SB 174 - In committee.
SB 184 - Headed for a floor vote, appears ready to pass.
SB 285 - appears to be dead
SB 862 - appears to be dead
SB 940 - In committee in assembly.

DLSE Precedential Opinion: Meal, Rest Period Violations Are Penalties

The DLSE has issued its first precedential decision (instead of posting letters) holding that (1) violations of meal and rest periods are penalities not wages, and (2) you can't get waiting time penalties on same.

The decision is available here.

Megan's Law and Negligent Hiring

Fisher & Phillips has this piece on the effect of Megan's law on negligent hiring. Interesting read.

Make Over on Makeup case?

I don't usually blog federal cases, but I found it interesting that the Ninth Circuit agreed to rehear en banc the Harrah's case. The Bakersfield Californian has more.

Body art in the workplace

The OC Register has this article on piercings/tatoos in the workplace. It's interesting in that it shows that in Orange County's tightening labor market that less employers care, while some worry about perception even still.

Question: would discriminating against someone who has a tatoo be illegal, if, say, that person was Polynesian? (The recent Ninth Circuit ruling made it clear that certain appearance requirements are ok, but what about when it's cultural?)

Wierd Economy

GDP growth is solid. Inflation is nil. (In fact, it was -0.1% this month). Interest rates are still at historical lows, despite a series of hikes (yet these hikes are not directly mirrored in all of the lending markets).

It sounds like we should be having a boom, but we're not. Today's initial unemployment claims were up again, outpacing the expert's predictions. And the economy has failed to produce many jobs, with some months better than others, but none stellar. And the stock market is agnostic as well.

There are some other wierd factors, like long term treasuries being lower than shorter term rates. What is the bond market saying about this economy? Is this all caused by the deficit?

What's going on here?

My lay opinion is that our fiscal realignment in the last 5 years has produced an increasingly rentier based economy, which would at least explain the lagging job growth during a period of GDP growth.

For employers, this means, applying my hypothesis, that this should be a time when all HR decisions are given extra care, because jobs are still hard to come by, and people in desperate straits may look favorably at the chance to recover in a lawsuit.

DLSE Depublished Partial-Day PTO Rule

Via Sheppard Mullin's blog, the DLSE has depublished their "controversial" opinion letter regarding, among other things, the use of partial day PTO or vacations by exempt employees.

A Rise In Wage and Hour Lawsuits?

Via The Employment Law Bulletin: the Christian Science Monitor reports that attorneys are starting to more actively pursue wage violations in many states. The article attributes this to the rise in service sector jobs. Is that it, or is it the decrease in union representation that might solve it in-house? Just curious.

Trop v. Sony Pictures Entertainment, Inc.

Plaintiff's statements that she had a fibroid removed and that she was hoping to become pregnant did not establish that employer was aware of pregnancy, and employee’s statement to employer at Christmas party that "[i]t looks like I get to have one of these," referring to a baby, was too ambiguous to place employer on notice of pregnancy. (However, the court notes in a footnote that Plaintiff didn't complain she was fired for attempting to become pregnant.)

2d Dist., Div. 5 No. B174101

(No free advice this Wednesday, I'm off to a conference)

King v. Tri-City Medical Center

This one is really more for the "interesting and sort of funny" file than for the practice hotsheet. The plaintiff checked the wrong box on her DFEH complaint, and, as a result, the Court of Appeal held that her case was dead.

While it's amazing how much a little checkbox can matter, it's also amazing how much courts can disagree. Courts have gone the other way too.

FREE ADVICE WEDNESDAY: Easing the blow of a firing.

QUESTION

I run a small business and I can't afford to offer much of a severance package to an employee that I need to get rid of, but I'm not sure what else I can do to get a release.

ANSWER

I get this one all the time. If you believe you have a "high risk" termination, you're wise to try and get a release. It can't cover everything, but it will sure help. If you're running a smaller business, it's probably going to hit you hard in the wallet to issue a chunk of severance (which allays the first concern of the departing employee: how do I pay my bills and get my next meal). Here are a few ideas you can use that are low cost.

(1) Allow the employee to resign, but agree not to contest unemployment.
(2) If you are covered by it, offer to pay a month of COBRA instead of salary.
(3) Offer a letter of recommendation (beware this one if they cause damage at the next place)
(4) Offer to expunge their file of some bad things.

That should give you enough chips in your exit interview to get a release out of many people.

Restatement of Employment Law?

The ALI is gearing up to draft an employment law restatement. It sounds like it could be somewhat interesting at first glance, but once you see what's in it, it sounds silly.

The right way to do something like that would be an exhaustive 50 state project, and could be a useful tool. I know in my practice, I compare federal and state law often, but I just don't have much reason to see what they're doing in, say, Kentucky on overtime (if anything). After a while, I think you'd start to find that a few positions would evolve and could be great arguments to use, especially if you're in appellate practice.

But, what's coming doesn't sound very good. Maybe as a resource for a law school textbook, but not much else.

See this critique, via Law Memo.

UPDATE: Labor Code 226.7 Decision

Apparently, the case in question has been mooted and it seems unlikely that a decision will be published in the case.

Labor Code 98, 98.2 and "Procedural Due Process"

I've started to wonder: at what level, if any, does a wage claim heard with the informal procedural rules of a DLSE hearing start to touch on due process? The legislature has decided that at $25,000 civil cases require more deliberation, discovery, and so forth. Congress has determined that cases above $75,000 between citizens of different states require the protection of a theoretically less biased federal judge.

If you've practiced in the DLSE, you know that either side can get a lot of questionable evidence into the record, and it's all left to the discretion of a hearing officer. Does the availabilty of de novo review eliminate this concern? (And if so, what effect would AB 382 have on that?)

It seems to me that if these sections are open to review right now, two possibilities should be considered: (1) cases over a certain amount ($100,000?) are kicked directly to the Superior Court, or (2) cases over that amount are given much broader discovery and tighter evidence rules at the DLSE hearing.

Free Advice Wednesday (late)

QUESTION

Under the Equal Pay Act, does someone hired on the same day, with the same responsibilities as me have to be paid the same amount?

ANSWER

Only if the reason for paying you differently is done on the basis of your gender. For purposes of other laws, any illegal discriminatory basis may apply. In general, however, there is no blanket rule.

Disclaimer: These questions are derived from questions I sometimes get, with different facts, laws, and so forth. Every situation is different, so talk to a lawyer if you have questions.

Welcome and Thank You.

There has been an unprecedented level of activity on this page this week. For those of you that are new, welcome! I thought now would be a good time to revisit my "mission statement" for this page. I started this "blawg" on July 1, 2004.

Here's what I initially set out to do:

I plan to include more than case law summaries and analysis. Law and lawsuits don't exist in a bubble. There are political and economic forces at work that shape them. To the extent I believe there is a causal nexus, those things will be covered as well. This will include at a minimum, tracking and discussions of pending bills in the legislature (and, sometimes, in Congress), and discussions of economic indicators that are relevant.

I am going to do my best to give objective, neutral commentary on these issues. This means I won't be championing issues on the side of the plaintiff's bar or the industry side. * * *

This is also not a blawg of record. Not every issue will be documented, largely because they are already so well documented.

I think I have mostly lived up to that over the last 11 months. I'd like to add some new parameters. I have not covered "traditional labor" issues, because I think those are well documented elsewhere. I had planned to cover the NHL lockout more closely than I have because it has some interesting dimensions (first and foremost, the union has a lot of wealthy members) and interesting implications. I haven't found much to add to the narrative there, though.

My niche has become the evolution and development of the labor laws of the state of California, and I hope to continue to follow that path.

Any input is appreciated and welcome!

Court of Appeal Holds 226.7 Imposes Penalties

I hear that a California Court of Appeal has certified an opinion for publication (possibly today) holding that Labor Code 226.7 imposes penalties not wages. This also means recovery under the UCL will not be possible. It also either confirms or bolsters the claims in the new regulations.

I'll post more when it shows up on the docket.

My AB 879 Article; AB 879 Update

Members of the State Bar of California's Labor & Employment law section can read my article on AB 879 in the California Labor & Employment Law Review here. (p.18)

The Assembly Floor and Committee analyses of the bill are now available.

Support for the Bill has increased a great deal:

• California Conference Board of the Amalgamated Transit Union
• California Conference of Machinists
• California Labor Federation, AFL-CIO
• California Rural Legal Assistance Foundation
• California Teamsters Public Affairs Council
• Engineers and Scientists of California, IFPTE Local 20
• Legal Aid Society - Employment Law Center
• Professional and Technical Engineers, IFPTE Local 21
• Terra Law, LLP
• UNITE HERE! AFL-CIO
• United Food & Commercial Workers Region 8 States Council

And opposition remains only with the California Chamber of Commerce (not informidable alone, to be sure).

On May 9, the bill passed out of Committee 6-2 (along party lines).

DLSE Revises Meal Period Regs Again.

The 15-day comment window on these revisions closes on May 25. The changes are not merely ministerial. (Is the DLSE opening itself up to a Cal-APA challenge?). Here are some of the changes.

• Removes language requiring on-premises meal period to have a place provided to eat.
• Removes requirement that employer make available meal period, only that workers be informed.
• Removes the poster requirement

There is more here from the Orrick firm.

Free Advice Wednesday: Changing Compensation Levels

QUESTION

Can my employer simply notify me one day that he has changed my salary?

ANSWER

If your employment contract is "at-will" California courts have held that employers may change the compensation level, because it is tantamount to ending one agreement and starting a new one. If you have a contract that guarantees a certain income for a period of time, then this probably can't happen. If your the member of a union, you should certainly talk to your rep to see what's up.

However, it should be noted that if you feel this has happened for an illegal reason (race, gender, etc.) it is also a no-no even if you are an at-will employee.

If you're an employer, you should review the circumstances carefully to make sure that your actions aren't having an illegal discriminatory effect or somehow violate a contract.

Free Advice Wednesday: Written Termination Notices

QUESTION
When I fire someone, do I have to give written notice?

ANSWER
Technically, under the Unemployment Insurance Code, you have to give a notice that includes the employee's social security number as well as a pamphlet called "For Your Benefit" to the employee.

Much of the employment law literature focuses on preventing wrongful termination suits, and that, of course is important. While they are more common than many people expect, they certainly don't happen every time. Almost every time, however, you'll have to go through the unemployment insurance process, and making mistakes there can lead to your account getting charged. It won't cost you as much as a wrongful term case, but it can add up. What's more, there's a minimal cost in complying with that regulation.

Sometimes it's the little things.

Do You Have A Camera Phone Policy ? (No, Really)

Nexsen Pruet has this advisory on camera phones in the workplace. Apparently, larger employment law firms are successful at drumming up business by scaring the crap out of employers. Here's their lead-in.

Your company’s confidential documents are being copied. Your biggest competitor has learned your trade secrets. Photographs of one of your supervisors disciplining an employee are appearing on a union organizing website. And, to make matters worse, a sexual harassment charge has just been filed against your company.

Boo! Now, good grief! I'm even getting a tick from reading that. Now, I'm not necessarily saying that you shouldn't have a camera phone policy. But, I think that each of those threats would be covered by a well-drafted policy manual that doesn't list each and every possibility. You run the risk of listing so many things that the list looks exhaustive. And then when the next gizmo comes along, everyone thinks, hey, it's not on the list!

What if people don't know they're not supposed to do those things without explicit mention of the phone? Same problem. They won't make that connection with the next gizmo. Focus on the behavior that's the problem, not every instrumentality of it. Keep sensitive documents secure. Keep meetings confidential if they are sensitive, and make sure you strictly enforce your sexual harassment policies. After all, do you really want an employee to say, "but I didn't take that picture of her butt with my camera phone! It was my camera!"

UFW Hopes For Win on Heat Bill

The Sacramento Bee, the best in my opinion on California politics, reports.

Since 1990, when California officials set up an advisory committee to reduce heat-related issues in the workplace, labor unions have waited anxiously for the state to adopt regulations.

Prodded by Valdivia's death, the United Farm Workers' top legislative priority this year is a bill that would require the state to establish standards to reduce heat illnesses and subject employers who flout the law to misdemeanor charges.

* * *

Last year, Schwarzenegger became what farmworker advocates say is the first Republican governor to sign a UFW-sponsored bill in California.

Bill Tracking Updates

AB 48 - Has been amended to index the minimum wage to inflation, in addition to a phased in hike to $7.75. It was voted out of its first committee 6-2 on April 20. Next up the appropriations (?) committee.

AB 640 (alternative workweeks) had a few slight changes last month, but failed passage in committee. Reconsideration may be granted, but until then, this one seems dead.

AB 875 has been amended to set up triggers to cause employer audits. It passed out of committee in an earlier form, but has been re-referred.

* AB 879 has been modified to streamline procedures with respect to garment workers.

SB 101 has received its floor and committee analyses, as well as support from the Chamber of Commerce.

* SB 174 has been changed from a shell to bill that will allow employees earning less than twice the minimum wage to bring a representative action any time they have to sue for wages. CLEL is upgrading its track of this bill.

SB 184 (talent agency bonds) passed out of committee.

SB 285 was apparently killed by its author, Senator Maldonado. Many expect him to run for Insurance Commissioner.

SB 862 - No action since last update.

SB 940 - Hearing postponed.

Top 10 Funny Employment Law Cases

From Law.com via Blawg Republic:

I like #7, maybe because I just made a joke about blonde's being a protected class earlier this week...

7. The 7th Circuit has ruled that punitive damages awarded to an employee in Lust v. Sealy Inc., a sex discrimination case, were excessive. Tracy Lust was promoted by Sealy to a position in its Madison, Wis., office two months after being passed over for a position in its Chicago office -- and shortly after she filed a charge with the Equal Employment Opportunity Commission. The court pointed out that her supervisor "had a history of making sexist remarks to Lust such as 'You're being a blonde again today.'" But the usually dour Judge Richard A. Posner, in a rare moment of levity, quipped: "Lust is blonde; Sealy points out irrelevantly that blondes are not a statutorily protected class, which will disappoint hair colorists."

Free Advice Wednesday: Commissions

QUESTION
I pay my employees based on commissions. Do I still have to pay them minimum wage, even if they don't earn it?

ANSWER
Yes.

There really aren't any exceptions to the minimum wage laws. And the penalties for violating them can be steep. First of all, you can be sued. Second, you can be held liable for the employee's attorney's fees that he accrues to get that money back. Third, you will also incur "waiting time" penalties, up to a month's worth of wages, for the time the employee went without the minimum.

What's worse is, if the employee was previously "exempt" from overtime, an income level dropping below twice the minimum wage (for full time) will also make that employee non-exempt.

Be careful setting compensation levels. It may not seem fair, but you're better off paying a little more to avoid these pitfalls. Just consider it a form of insurance.

Free Advice Wednesday: Can My Employer Make Me Use My Own Car?

QUESTION

Can my employer make me use my own vehicle for work?

ANSWER

Sure.

But it's probably not the best idea that they do that, from their perspective, because it opens them up to liability in situations they might not otherwise have it. From yours, it means that you incur expenses in gas, wear and tear, and so forth. You're entitled to reimbursement for those expenses under Labor Code section 2802. There are handy charts that can tell you how many cents per mile you should get.

UPDATE: The DLSE considers the rates set by the IRS to be sufficient:

DLSE has opined that use of the IR S mileage allowance will satisfy the expense s incurred in use of an employee’s car in the absen ce of evidence to the contrary.

Disclaimer: The above advice is not intended to reflect any actual situation and reflects a casual scan of the law as understood by the author at this moment. Anyone who needs legal advice to meet their particular situation should retain counsel, and SIOULD NOT rely on the above.

Mendoza v. Town of Ross 1st Dist. No. A103878

I haven't found a case I thought was worth posting in a while, but I thought this one at least added something to the parameters of the FEHA.

. . . [W]e conclude that the trial court correctly sustained the Town’s demurrer without leave to amend because Mendoza was an uncompensated volunteer and not an “employee” for purposes of imposition of liability for unlawful employment practices under FEHA.

Mendoza v. Town of Ross, 1st Dist. No. A103878 at 1.

The Opinion goes on to clarify the source of the definition of "employee" for FEHA purposes:

More helpful is the definition of “employee” contained in regulations enacted by the Department of Fair Employment and Housing (the Department) to implement the FEHA. The Department, which was created by the FEHA (§ 12901), defines an employee as “[a]ny individual under the direction and control of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written.” (Cal. Code Regs., tit. 2, § 7286.5(b).) While the interpretation of a statute is ultimately a question of law, appellate courts will defer to an administrative agency’s interpretation of a statute or regulation involving its area of expertise, unless the interpretation flies in the face of the clear language and purpose of the interpreted provision. (Communities for a Better Environment v. State Water Resources Control Bd. (2003) 109 Cal.App.4th 1089, 1104.) Far from being in conflict, section 7286.5, subdivision (b) of title 2 of the California Code of Regulations fills a gap in the governing statute, and provides a workable definition of who may be considered an employee, and thus entitled to the protection of the FEHA.

Thus, on its face, the FEHA confers employee status on those individuals who have been appointed, who are hired under express or implied contract, or who serve as apprentices.

Id. at 6.

Free Advice Wednesday: Maximum Hours For "Salaried" Employees?

Welcome to a new feature of CLEL: "Free Advice Wednesday." I'll be posting on topics that come up from time to time that I think are worth getting out there. Of course, as a disclaimer, you should never do what I say, this is all hypothetical, etc.

---

QUESTION

There's no maximum time a salaried* employee can work, right?

ANSWER

Wrong.

Employees can work 24 hour days, but they can't work for more than six days per week, on average. There are exceptions for emergencies, protection of the loss of life or property, CBAs, and a few other rare circumstances. The DLSE can issue exemptions, though, if they choose to any employee or employer.

It's a misdemeanor if you don't comply and it also has typical Labor Code penalties associated with it too.

References: Cal. Lab. Code §§ 550 et seq.

---

* This is the term that is going to most likely be used in a question asked to me. For the purposes of this question, I'm going to assume that in addition to they're being non-hourly employees they are also "exempt" employees.

AB 879 Amended

AB 879 was changed to provide that CCP 473.5 shall also be effective to provide relief from a forfeiture. See here (PDF).

One In Five Employees!

Yahoo (via LaborProf Blog) reports that "One out of five (20 percent) U.S. workers claims that racial or ethnic discrimination exists in the workplace, according to a national survey by Hudson, reporting that they know of someone who has been denied a job, increased pay or promotion because of their ethnicity. That figure jumps to 31 percent for African-American workers, yet drops to 18 percent among white employees."

I hope you've updated your employee handbook lately and have trained your supervisors on how to deal with these situations.

Storm's First Hypothesis of Employment Litigation

Storm's First Hypothesis of Employment Litigation (I will rename it in honor of the person who really came up with this as soon as I find out who it is--I never come up with anything original): slower wage growth means more employment lawsuits. (I have a closely related hypothesis that the overall number of employment lawsuits directly corresponds to the unemployment rate, also surely not original, but I don't know whose idea it is either).

Apropos of that. . .

Steven Greenhouse reports in the New York Times (reg. req'd) that "Even though the economy added 2.2 million jobs in 2004 and produced strong growth in corporate profits, wages for the average worker fell for the year, after adjusting for inflation - the first such drop in nearly a decade."

The article touches on, but doesn't directly tackle the issue that real wages by quintile of income have been more or less flat for 30 years in the lower quintiles, while the higher end 1% or so has had skyrocketing wages. There are a number of possible conclusions from this. On the one hand, it argues for a system that has decoupled work from wages and is inequtiably distributing the fruits of that work; on the other hand, it shows that the class more closely tied to the market system is doing the best. . . plug that into the social security debate.

I report, you decide. (;

Bill track update; too many emergency regs?

I'm sure you can read all about the Supreme Court's decision on the ADA elsewhere.

The Governor is starting to face some blowback from his (over?) use of emergency regulations. The Times reports.

AB 879 (DLSE procedures) was referred to the committee on Labor & Employment.
SB 101 (pay stub rules) was amended on 3/14, mostly clarifications.
SB 174 (minimum wage) is set for hearing in committee on 4/13.
SB 285 (termination pay) is set for heaing in commitee on 4/13.

Thank You to Assemblyman Torrico

I would like to write a brief thank you here to Assemblyman Torrico, and his staff (especially Lennies Gutierrez) for responding to my questions about AB 879.

CLEL will have a report on the bill soon; I'm trying to get comment from some other organizations at this point.

SB 382 Track; Teachers Work-To-Rule

CLEL will be tracking the as-yet unwritten SB 382 which proposes to reclassify all orchestral players as independent contractors, since CLEL serves on the board of the local symphony. CLEL's initial take is that this bill is DOA, but we'll see.

The teachers' "work-to-rule" strike, which started in Berkeley and how now spread to the San Fernando Valley, may spread to the entire LA School District. The LA Daily News reports.
(Has anyone else heard of stike where the workers' tactic was to do only what the employer bargained for in the contract? If you're familiar at all with all of the extra work done by teachers, you realize that the sad truth is, if the teachers only fulfill their contracts, education will come to a screeching halt.

Economic downturn?

UCLA forecasters say the economy will cool as the housing boom flattens. The Sacramento Bee reports.

AB 879 Analysis

Here's the money section of the bill:

SEC. 2. Section 98.2 of the Labor Code is amended to read:

98.2. (a) Within Except as provided in subdivision (b), within 10 days after service of notice of an order, decision, or award the parties , any party may seek review by filing an appeal to the superior court, where the appeal shall be heard de novo. A copy of the appeal request shall be served upon the Labor Commissioner by the appellant. For purposes of computing the 10-day period after service, Section
1013 of the Code of Civil Procedure is applicable.

(b) Notwithstanding subdivision (a), a party who has failed to file an answer, to attend the administrative hearing, and to seek administrative relief pursuant to subdivision (f) of Section 98, shall not obtain a de novo hearing on appeal, but the superior court shall review the administrative order, decision, or award for an abuse of discretion only, unless the court finds that the appellant is entitled to relief in accordance with Sections 473 or 473.5 of theCode of Civil Procedure.

Apparently, the staff in Sacramento didn't have the safe iron-fisted drafting professor I did! Cross-referencing sections! Bad! Anyway, this, along, with AB 1311 may signal a shift in the mind of the Legislature towards treating the DLSE hearings as more like a specialized court. If this is so, will the evidence rules become more formalized?

I'm going to ask for comment from the bills' authors. I will post it here.

New rules on hiring undocumented workers?

The San Diego Union Tribune reports on a new proposal in Congress to punish employers who hire illegal immigrants. The penalties may be up to 5 years and $50,000.

California Assembly Bill Tracking

A summary of employment and (non-public) labor related bills in the legislature.

CLEL will be tracking the minimum wage bills (AB 48, SB 174, and SB 862) as well as AB 879, which requires employers' presence at DLSE hearings. CLEL will keep its eyes on everything else, but these have piqued our interest right now.

---

AB 48 - Shell to raise minimum wage.

AB 57 - (Postpoened hearing) - Modification to prevailing wage calculations.

AB 169 - (Postponed hearing) - Increase in penalties for gender-based unequal pay.

AB 222 - (In commitee) - Changes enforcement of prevailing wages from awarding agency to DLSE.

AB 364 - (In committee) - Modifies definition of "public works."

AB 391 (In committee) - Would allow unemployment to workers involved in a trade dispute.

AB 419 - (In committee) - Modification to young artist comepnsation scheme.

AB 474 - () - Would change calculation of prevailing wages.

AB 553 - () - Would require change in calculation of overtime in prevailing wages.

AB 510 - (In committee) - Would require the Labor Commissioner to establish a proof of coverage program to detect unlawfully insured employers.

AB 551 - (In committee) - Would change the status of employment agencies for domestic workers to non-employers in certain situations.

AB 640 - (In commitee) - Allows certain employees to be exempt from alternative workweek schedule.

AB 673 - (In committee) - Nonsubstantive changes to Labor Code.

AB 674 - (In committee) - Nonsubstantive changes to Labor Code.

AB 775 - () - Changes in penalties for rest poeriod violations in garment and agricultural workers.

AB 822 - Technical changs to acceptable forms of payments.

AB 875 - State oversight of alternative workweek elections.

*** AB 879 - Failure to appear at DLSE hearing would prevent employer from de novo appeal in superior court.

AB 904 - Allows an individual to exempt herself from alternative workweek under certain conditions.

AB 985 - Would forbid employers from discriminating against active duty called-up National Guard employees.

AB 1012 - Technical changes to overtime statute.

AB 1093 - Tehcnical changes to rules regarding payment of wages.

AB 1255 - Tehcnical changest to overtime statute.

AB 1311 - Would allow services of DLSE complaints in same manner as civil.

AB 1626 - Extends definition of employee to include former employees for purposes of requiring production of employee file. (Isn't this already the case?)

AB 1709 - "Plain language" workplace posters.

SB 101 - (Returned to comm. after second reading) - Changes to pay stub rules.

SB 174 - (In committee) - Shell bill to increase minimum wage.

SB 184 - (In committee) - Talent agency bonding requirements.

SB 285 - (In committee) - Changes requirements for payment upon termination.

SB 862 - (In commitee) - Immediate minimum wage bill.

SB 940 - (In commitee) - Changes the prevailing wage law re: residential projects.

Jon-Erik Storm - Professional Summary (Stunt 101)

P R O F E S S I O N A L__S U M M A R Y

JON-ERIK G. STORM

Jon-Erik G. Storm is an associate with Employer Advocates Group LC (“EAG”) in San Luis Obispo, where he practices employment litigation and counseling. He is the creator and editor of the legal web-log, “California Labor & Employment Law,” http://calemploymentlaw.blogspot.com, the only web-log devoted exclusively to all aspects of California Labor and Employment law.

Mr. Storm has a broad range of experience representing employers in civil, administrative, and appellate litigation, where he has won a number of dismissals and other victories for his clients. Mr. Storm also has wide-ranging experience providing consultation and advice to employers, assisting his clients with the ongoing development of their employee and human resource policies as well as assisting them with day-to-day matters. Mr. Storm represents the full spectrum of clients, from Fortune 500 corporations to individuals, and understands the differing needs of a diverse clientele.

In addition to his blog, Mr. Storm has also been published on varying subjects of employment law in different media. Mr. Storm's analysis of a recent assembly bill in the legislature was published in the May 2005 edition of the California Labor & Employment Law Review.

Prior to joining EAG, Mr. Storm was a judicial extern for both the Honorable Lloyd King and the Honorable Robert J. Faris, Chief Judge, at the United States Bankruptcy Court for the District of Hawaii. Mr. Storm received the Chinen Award for his exemplary service to Judge King and Judge Faris.

Mr. Storm is a 2003 graduate of the Illinois Institute of Technology’s Chicago-Kent College of Law. During law school, he received two CALI Excellence For The Future Awards for outstanding academic achievement, and was an Editor of Fiat Justitia, a journal of law and policy. Mr. Storm also founded the Chicago-Kent chapter of the American Constitution Society For Law and Policy.

Prior to law school, Mr. Storm attended Pitzer College (B.A., 1999), a member of the Claremont Colleges, and Claremont Graduate University (M.A., 2001), where he studied Philosophy.

Mr. Storm is a member of the American Bar Association, the San Luis Obispo County Bar Association, and the Labor & Employment Law Sections of the State Bar of California, the Los Angeles County Bar Association, and the Bar Association of San Francisco. Mr. Storm founded and chairs the Young Lawyers Section of the San Luis Obispo County Bar Association.

He is licensed to practice law before all of the courts of the State of California and the State of Minnesota. Mr. Storm is also admitted to the bar of the United States Courts of Appeal for the Federal Circuit and the Ninth Circuit.

Mr. Storm is currently serving on the board of directors of the San Luis Obispo Symphony.

If your business needs help sailing the perilous waters of California's employment laws, call an experienced navigator.

We're Back: Labor Conference in Las Vegas; NHL

I apologize to my few readers for my total lack of posting the last few weeks. I've still been checking for new developments in the Courts and Legislature, but honestly, due to an emergency at work, I haven't been as diligent as I could be.

The Bee has a good article on the labor meeting going on. I think there will be interesting developments.

As what I had expected to be the labor war of the decade (even if it's not exactly what most people think of when they think of unions), the NHL cancelled its season. At the 11th hour, the player's union split and one faction buckled to accept a salary cap. Even still, the two sides couldn't seal the breach. The NY Post's (ironically) Larry Brooks has been saying this was management's strategy all along: to force an impasse. The problem there is, except in Alberta, impasses don't work the way the do here--you can't have replacements. That would mean that Toronto and Montreal would not be in the league. That won't work--would it?

Prop 64 Retroactivity

Every trial court order holding that Proposition 64 applied retroactively is now invalid under California's prinicples of stare decisis, because the 1st Dist. Court of Appeal has issued an opinion holding that it does not.

This is consistent with a string of California Supreme Court cases going back years and including ones as recent as November. Not a surprise to me (as you may have read), but expect shock-and-awe "updates" from the panic marketing firms tomorrow.

For more, as always, check out The UCL Practitioner, who has been following the Prop. 64 issue like no one else.
wine

wine

wine

wine

California Quarter

There's not a lot of California Employment news today (or any, really) so I thought I'd post a link to an article about the new California quarter, reported by the Sacramento Bee.

For as much patriotism as I see these days, I hear just about as much anti-California sentiment within the state as I used to hear in other states against it. That's a shame. As employment lawyers of any stripe, we know things aren't perfect, but things are pretty good too.

Eureka!

Internet Security: Too much?

Apropos of my recent post on the many vulnerabilities of Microsoft Internet Explorer, I thought I would share another experience that has arisen in the context of this blog.

From time to time in connection with my law practice, I send out via email information to clients with an attachment. Sometimes there is little or no information in the actual text part of the email. Worse, sometimes there are multiple recipients.

Today, I noticed that three recipients rejected my email. Upon further investigation, I discovered that my law firm's IP address had been listed on a spammer service. (You can check yours here http://openrbl.org/ ) Ostensibly, this is because some mail with a virus or trojan was relayed at some point from this IP, or there was on open proxy.

This particular server runs a dedicated e-mail virus scanner that updates its indexes every 2 hours and heuristically scans for malicious code. It is behind a very expensive, very fancy Firebox firewall with literally five or six open ports. I have performed a security audit of this server on my own, and, I should add that it would be very difficult to penetrate it from outside.

I requested that my IP be removed, but I have no idea how effective this will be. This database claims that it lists 82,000+ IPs.

This is going too far.

I hate spam. I think it and spyware are combining to break the Internet. However, seriously impeding the flow of legitimate email is even more damaging. Spams can be deleted; block legitimate emails are unknown to the recipient!

Here are some suggestions in the meantime.

(1) No more e-mail lists. Use a blog or a hosted webpage and have people check the link.
(2) Use your ISP's SMTP relay exclusively (they might have ridiculous restrictions thought)
(3) Request a delivery receipt or a read receipt on all important messagegs.

It's one thing having to work to stop spam. It's another thing to have to monitor services tracking spammers to make sure your legit mail is working.

Assemblyman Disses New Regs

The Sacramento Bee reports.

State labor officials say they are simply providing choices for employees who want to work through meal breaks and leave early, rather than take a 30-minute breather in the middle of their shift.

"Frankly, I think this proposal is simply an attempt to usurp power from the Legislature and other public entities, and to consolidate it within the administration," said Koretz, D-West Hollywood.

And here's a puzzling comment. "Wednesday's hearing was the latest twist in what has become a recurrent theme at the Capitol: allegations that Gov. Arnold Schwarzenegger is taking a heavy-handed approach to labor unions." As far as I know, meal periods are not one of the things that can be bargained away in a CBA, so I don't see how that affects unions per se.

Also, "seven former employees of Thunder Valley Casino have filed a civil suit alleging sexual harassment, age and sex discrimination and wrongful termination." The Bee reports. (It's hard to beat the Bee for California issues.) I think this will be an interesting and important development, ie to see how these turn out.

NLRB finds LA area hotels' declaration of an impasse was illegal. The Los Angeles Times reports.

Views on Norcal Grocery Contract

The Contra Costa Times reports—the article frames the contract as less than perfect, but, of course, this one was reached without a nearly 5 month-long strike.

The Los Angeles Times notes that SBC is bringing back traditional pensions.

CLEL also notes that there haven't been any interesting employment law cases out of California courts for a while, but, if you're interested Kim at the UCL Practitioner is tracking the day-by-day evolution of Proposition 64.

Workers' Comp Rates Drop

Workers' Comp rates have dropped on average about 15% in the last six months. The Sacramento Bee reports.

A Note On Computer Security & Changes To This Site

I am considering moving this site to one of my personal servers. If so, that move would be next week. The main change would be the URL, but I will continue to use blogger/blogspot for the foreseeable future.

While I'm on that note, I'd like to say a thing or two about the Internet and security. Before I became a lawyer, or even went to law school, I worked for almost 10 years in the computer industry. I owned a domain name in 1992, and was building computer networks well before the Internet revolution.

Back in those days, viruses were much more malicious. They would wipe out your hard drive. But like biological viruses, the ones that kill off the host organism too quickly do not get a chance to propagate. But today, the literally scores of programs that run without your knowledge on your computer diminish the power of your computer and suck internet bandwidth, thereby raising the cost. Yesterday's Internet Explorer vulnerbaility was the last straw for me, and I switched to Mozilla.

I was hopeful that anti-spam legislation would be almost as effective as the do not call list was for telephones; it has not been. Therefore, I'm even more doubtful that any legislative action against "spyware" will solve the problem either.

It's up to the software makers. They'd better act, because as I see it, the Internet is broken.

State Farm Settles

The LA Times reports.

State Farm Insurance Cos. agreed to pay $135 million to settle a lawsuit alleging that it failed to pay overtime to 2,600 claims adjusters in California.

SF hotel union negotiations hit another snag. The SF Chronicle reports.

And the Norcal grocery workers . . . not all worked out yet. The Chronicle reports.

AB 48

CLEL announces its first bill track of the 2005-06 Legislature: AB 48. As introduced, the bill is a shell. The Sacramento Bee has a report. According to this report, this measure would be indexed to inflation.

Happy New Year

Unless the Legislature repeals the Labor Code in an emergency session, today will be the last day of posting for 2004. I was thinking about doing a 2004 retrospective, or a 2005 "what's new," but I'm sure that the shock and awe literature from BigLaw has that covered.

Anyway, CLEL hopes your 2004 was great and your 2005 is better!

Emergency Regs Withdrawn in Favor of Permanent Ones

Or "DLSE Discovers Administrative Procedures Act" (;

No emergency regs, folks. They will be proposing permanent ones. Take a look.

TITLE 8. INDUSTRIAL RELATIONS
Division 1. Department of Industrial Relations
Chapter 6. Division of Labor Standards Enforcement
Subchapter 11. Meal and Rest Periods
§13700. Meal and Rest Periods
(a) Definition. As used in this section, “work period” means that period of time during which an employee is subject to the control of the employer. A work period begins at the time an employee begins work and ends at the time the employee either takes a meal period or stops work for the day. A new work period begins each time an employee resumes work after taking a meal period.
(b) Requirement to Provide Meal Periods
(1) An employer shall be deemed to have provided a meal period to an employee in accordance with Labor Code Section 512 if the employer:
a. Makes the meal period available to the employee and affords the opportunity to take it; andb. Posts the applicable order of the Industrial Welfare Commission; andc. Maintains accurate time records for covered employees, as required by the posted order;
(2) As a further precaution beyond the criteria required under (b)(1), an employer may inform an employee in writing of the circumstances under which he or she is entitled to a meal period in a way that permits the employee to acknowledge in writing thathe or she understands those rights.
(c) Beginning of a Meal Period
(1) Employment of less than 6 hours per day an employer may not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes. If the total work hours per day of the employee are no more than six hours, the meal period may be waived by mutual consent of both the employer and employee.
(2) Employment of more than 6 hours, but less than ten hours, per day.Unless provided otherwise by an applicable order of the Industrial Welfare Commission, a meal period as required by Labor Code Section 512(a) may begin before the end of the sixth hour of the work period.a. An employer may not require an employee to begin a meal period after the end of the sixth hour of work, except as provided in Labor Code sections 512 (b) or (c).b. If an employee requests a meal period to begin after the end of the sixth hour of work, an employer is not in violation of Labor Code 512 so long as the employee was provided the availability and opportunity to take a meal period before the end of the sixth hour of work.
(3) Employment more than ten hours but less than twelve hours per day.An employer may not employ an employee for more than 10 hours per day without providing a second meal period of not less than 30minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.
(4) Examples
Example 1: A non-exempt employee begins work at 8:00 a.m. andworks without a meal period until 1:00 p.m. The employer is required to provide a meal period to the employee at this point ,as the employee will work more than 5 hours. However, if the employee’s work will end no later than 2:00 p.m., the meal period may be waived by mutual consent of the employer and the employee.Example 2: A non-exempt employee begins work at 8:00 a.m. and works without a meal period until 1:10 p.m. The employee has worked over 5 hours and is entitled to a meal period. The employee has not requested the meal period to begin after the end of the sixth hour of work. Without the employee’s request, the employer may not require the meal period to begin after 2 p.m. as this would beafter the end of the sixth hour.Example 3: A non-exempt employee begins work at 8:00 a.m. and is provided a meal period, which begins at 10:30 a.m. The beginning of the meal period ends the initial work period of that employee’s work. Upon returning to work at 11:00 a.m., the employee commences a new work period. The employee then works until 4:00 p.m. If the employee continues work beyond this point, the employer is required to provide another meal period to the employee, as the work period will exceed five hours. However, if the employee’s work will end by 5:00 p.m., the second meal period may be waived by mutual consent of the employer and the employee.Example 4: A non-exempt employee begins work at 8:00 a.m. and works without a meal period until 1:00 p.m. After taking a half-hour meal period, the employee returns to work at 1:30 p.m. and works until 6:30 p.m. If the employee works beyond this time, the employer is required to provide a second meal period to the employee. However, because the total hours worked by the employee in the day exceeds 10 hours, but not more than twelve, the second meal period may be waived by mutual consent of the employer and the employee as the first meal period was not waived.
(d) Penalty for Failure to Provide Meal or Rest Period. Any amount paid or owed by an employer to an employee under Labor Code section 226.7, subdivision (b), for failing to provide the employee a meal period or rest period in accordance with anapplicable order of the Industrial Welfare Commission is a penalty and not a wage.(e) Severability. If the application of any provision of this regulation, or any section, subsection, subdivision, sentence, clause, phrase, word or portion thereof should be held invalid or unconstitutional or unauthorized or prohibited by statute, the remaining provisions thereof shall not be affected thereby, but shall continue to be given full force and effect as if the part so held invalid or unconstitutional had not been included herein.Authority: Sections 53, 54, 55, 59, 95, 98, 98.8, 1193.5, and 1198.4, Labor Code.Reference: Sections 226.7 and 512, Labor Code

Question Begging on Prop 64

No matter how much $500 per hour verbiage I read, I still can't see how Prop. 64 is retroactive under the law. Especially the argument about it "not affecting substantive rights" is thoroughly question begging.* That means, in logical terms that you assume the truth of the conclusion to prove the question.

If you agree that the non-harmed Plaintiff did not have a substantive right under the UCL, then clearly, no rights were affected. But to believe that, you have to accept that contention. I disagree, and I don't think it's much of a matter of opinion.

Before Prop. 64 I personally possessed the right to enforce laws under the UCL. Now I do not. End of question.

If you live in a defense-bar echo chamber (which I try to avoid being in) then, sure, those people never had real "rights" anyway, so of course nothing is affected. I could speculate that this stems largely from these BigLaw power lawyers farming this research out to junior associates who have Article III standing fresh on the brain and can't grasp the fact that it doesn't apply in California.

But you have to beg the question of there being no right to make this argument work. That's not to say that plenty of results oriented judges out there won't disagree, but this is more a matter of logic than of fact. It's a shitty argument and they should be embarrassed making it.

I'll continue to review the other arguments. E-mail me if you think you can win me over.

(Editorial Note: Once again, I am not making any comment on the propriety of the UCL or Prop. 64)

P.S. Snaps and props to The UCL Practitioner for being more than on top of this from day one. What an excellent resource!

* Smile. This may be the only time this year you read this term in its correct definition and not as sloppy shorthand for "poses the question" or "leads one to ask."

Guv Tries to Terminate Lunch Breaks

Or at least flex their scheduling. The Contra Costa Times reports.

The regulations would give employees leeway to schedule a lunch during the sixth
hour of work. Companies could help meet the lunch requirement if "the employer
informs an employee of the circumstances under which the employee is entitled to
a meal period and the employee acknowledges in writing that he or she
understands those rights." * * *The new rules would also reduce the time period
in which a worker could file a legal complaint from three years to one.

The nurse labor issue in Fresno continues, the Fresno Bee reports.

Lujan v. Minagar etc.

Lujan v. Minagar - Firing someone because you think they're about to report you violates Labor Code Sec. 6310, which prohibits termination of employee in retaliation for reporting violations of Occupational Safety and Health Act.

Lonicki v. Sutter Health Central - Employee who was performing nearly identical duties for two employers but claimed to be unable to continue doing so due to medical condition could not take California Family Rights Act leave from one position and not the other. Where sole documentation of purported medical condition was note from family nurse practitioner saying employee would be out of work until a specified date for "medical reasons," employee did not provide satisfactory evidence of "qualifying medical condition," and employer was not required to invoke "three-opinion" procedure as a prerequisite to litigating CalFRA claim.

TA strike at Cal State

Academic student employees at the 23 California State University campuses will
stage a one-day strike today over unresolved labor issues.

The Chronicle reports. The NLRB's recent ruling in NYU. does not apply to state employees.

New Legislative Session

Some early bills of note:

AB 57: would provide employers some flexibility about when they pay elements of prevailing wages.

AB 48: another legislative minimum wage hike. It's called a bill, but looks more like a resolution to me. Does anyone know the difference?

Job Numbers

Non-farm payrolls were up only 112,000 in November, after a (revised) 303,000 new jobs were added in October. Unemployment sunk to 5.4%, while the average work week was down 0.1 hours and the average hourly earnings were up 0.1%.

The market probably won't like this. They were thinking there would be about 200,000 and were about ready to feel relief on lowering oil prices. Probably more of an effect on bonds, which is freaking out right now.

I'm still trying to get ahold of good statistics, but for employers I think this means you will see more post-term charges and complaints. . .

Prop 72 Wins?

[UPDATE: Via California Insider: Glitch fixed; alarm over. Prop. 72 still loses.]

According to the LA Times, Prop. 72 may have made a late comeback. If you've already flushed that one, it's the one that requires employers with more than 50 employees to provide health care benefits.

Though this may be due to an error, it isn't clear. We'll know more soon.

Thoughts on Today's Prop 64 Conference

[UPDATE: Apparently, a Court of Appeal has allowed a UCL action with no injured-in-fact Plaintiff to proceed. Shows what I know.]

[UPDATE: Apparently at least one demurrer has been granted on the basis that Prop. 64 applies retroactively by a Judge in Los Angeles. Shows what I know.]

I sat in on today's teleconference given by the anti-trust section of the state bar on the changes to the UCL brought on by prop 64. I have to say that I was pretty unimpressed with the arguments presented by the defense bar (of which I am a member). I don't blame them for making them--it's their job--but I just don't think they're convincing at all. My apologies to those who disagree, but it seems to me that this only became a research project since Election Day, and there hasn't been much notice of the increasingly stronger anti-retroactivity language coming out of California's courts in the past years.

I also think the argument flowing from the procedural/substantive distinction is, frankly, farcical. I think there is merit to the contention that the portion that requires class certification might be considered purely procedural, but the part that withholds standing from others destroys their former substantive right to enforce laws against unfair competition. In other words, from the point of view of a citizen or a public interest group that didn't lose actual money or property, they now do not have a right they previously had. If that's not substantive, I don't know what is. I think we can also dismiss summarily the arguments that because the right is statutory that it can be retroactively changed automatically (clearly refuted by the recent McClung case, ruling on the FEHA, which involves statutory rights) or that it "merely" governs how these actions are prosecuted, and, most absurbly, distorting the language of the voter information pamphlets—of all things—to coax an inference of retroactivity.

I will at least grant that the style, if not the substance, of the defense bar presenters was excellent. It's just that I can only picutre in my mind what an appellate panel would do to it.

There was high level political genius behind Proposition 64. First, those who explained that the funding provision of the penalty amendments was done to give the appearance that this wouldn't hurt consumer protection because it would provide funding for the public agencies responsbile for it to do so plainly ignored the commentary given by the District Attorney who was present. This was meant to give that appearance, but not only to the people voting on it, but also to the Legislators controlling the purse strings later. They can rely on this, correctly or not, to fund this enforcement and slash its funding from the general fund. Political tactics of this level of genuis only come from very well put-together organizations. The Prop 64 opponents were not playing on this level, and they weren't playing on that level when they failed to reach a legislative compromise last spring. Welcome to the NFL.

So far, the only court to rule on this has agreed with me. In my practice, every single UCL case I defend against (or have brough as a plaintiff) includes a plaintiff who was injured in fact, and the majority now include class allegations. I understand if you're in the middle of defending a "public interest" case that you hope this will save you, but I doubt it will. You can run it up to the Appeals systems, but something tells me most Courts are just going to allow amendments to the pleadings to include class allegations and a correctly injured plaintiff (if there is one), and the courts will probably stretch the "money and property" provision as far as they can. There will probably be a small number of outright dismissals—and it seems to me those won't be the cases of the family business, but environmental ones.

In sum, I know the issue of retroactivity is hot right now, but I don't think it's really all that important except in cases of vague injury in fact, which, to me, is where the action will be in the courts.

[Editorial Note: I normally refrain from expressing opinions, as is my policy. I am not expressing my opinion on the propriety of Proposition 64 or the UCL itself; just on the arguments put forth for and against the retroactive application of Prop 64, which is consistent with my meta-commentary on the reporting and editorializing done by others, without commenting on the underlying issue. Please do not take offense.]

Writ.

CLEL will be working on an extraordinary writ filing this week, and, therefore will not be covering the news. If I see any interesting cases, I'll still post them.

P.S. Thanks to The UCL Practitioner for the reference. I can't imagine that the Defense bar will be able to get around McClung and the long-term march of California's courts against retroactivity. I wonder what the CLE program tomorrow will say about it? (CLEL will try and squeeze that one in.)

Oh, NOW you end it (=

So, the lockout ends in San Francisco. Thanks guys. No way you could have gotten that done in time for my conference? (= Those scab maids had no idea how to do a room. Seriously. Apparently, the honchos at the management companies agreed. [No, of course I don't seriosly expect any of this done on my timetable.]

Workers' Comp judge files a workers' comp case after death threat. Cue Alanis. It's ironic. The Sacramento Bee reports.

California's 150 workers' compensation judges are six times more likely to file on-the-job injury cases than their judicial counterparts in state government, a Bee investigation has found.

Six times more? Attention appeals court judges: file claims for tongue whiplash after intense colloquy. Is that amount attributable to just knowing their rights alone? Do Superior Court judges not know their rights?

NELI Update

I stepped out for a minute to check on things while the discussion veered into something that I simply do not do in my practice, namely Sarbanes-Oxley Compliance.

So far the speakers have been interesting and professional. The hotel strike outside provides an interesting backdrop for the discussion, especially this mornings Labor Lab update. Most of what we're hearing here is not that useful for most of us, because we practice in California and the FEHA is uber alles here, but definately built on the wider backbone of this kind of Federal law, so your have to have it.

No significant news or cases to report on today.

Case Watch.

CLEL will be watching for results in these cases:

• Dore v. Arnold Worldwide, Inc., pending before the California Supreme Court. Issue: at-will employment.


• Lyle v. Warner Bros. Television Prods., pending before the California Supreme Court. Issue: FEHA/sexual harassment.
  
• Powers v. The Rug Barn, pending before the California Supreme Court. Issue: tortious interference with at-will employees.


• Reynolds v. Bement, pending before the California Supreme Court. Issue: wage/hour.


• Smith v. Jackson, pending before the U.S. Supreme Court. Issue: ADEA
  

Fresno Nurses Strike?

The Fresno Bee reports:

The California Nurses Association, which represents about 300 nurses at University Medical Center, delivered the 10-day strike notice to hospital officials late Friday. The advance notification, required by law, was delivered not long after contract negotiations between the two sides concluded earlier in the day. The two sides have been trying to come to a contract agreement for more than a year.

In the California Journal, this article discusses the trends in union membership and other changes over the years.

NELI

CLEL will be attending NELI this Thursday and Friday in San Francisco. Hope to see you there.

News

More on State-Board-Members-Gate from the Sac Bee.

News.

The Chronicle has this personal story piece on the hotel lockout.

Class-action age discrimination suit against Vons coming soon? The Fresno Bee reports.

Unemployment Insurance Appeals Board, Workers Compensation Appeals Board, Agricultural Labor Relationsh Board, and Cal-OSHA official told "they'll be back" from 9-5. The LA Times reports.

A group of injured workers has filed a legal challenge to the recent workers' compenstaion reform. The LA Times reports.

Currently, an injured worker is allowed to choose any doctor after the first month of treatment is completed. After Jan. 1, a worker will have to pick from a pool of doctors who belong to tightly controlled physician networks organized by companies or insurers.The suit maintains that the new rule should be applied only to people hurt on the job after Jan. 1. The suit filed in Sacramento by the California Applicants' Attorneys Assn. names as defendants the state Division of Workers' Compensation and Director Andrea Hoch.

Westside Concrete Co., Inc. v. DIR, DLSE, et al.

2d App. Dist. No. B167037

This case stops short of ruling on and giving specific standards for the applicability of the DLSE Opninion Letters, but it strongly suggests that any of them that purport to show a general rule that isn't the only possible interpretation (a la Tidewater), are probably in violation of the APA.

This is probably enough for parties, defendants especially, to start filing motions about, but it's far from conclusive.

The DLSE's website itself notes that the letters are currently under review for APA compliance.

I can see why there is controversy, but it sure helps to have an explanation of how the agency is thinking on any given issue. If they're wrong, you can always fight it, but at least you know where they're coming from.

I'm afraid rather than helping either side, this kind of ruling will simply force the DLSE to go underground with their procedures.

Governor Names Jack Henning to head EDD

The LA Times reports.

After upsetting labor unions by favoring corporate interests this year, Gov. Arnold Schwarzenegger on Tuesday appointed a Democrat and longtime labor leader to manage the sprawling bureaucracy of the Employment Development Department.

The AFL-CIO confronts the future. The LA Times reports.

Lines have already been drawn, with fast-growing, aggressive unions such as the 1.7-million-member Service Employees International Union demanding that the labor movement consolidate much as corporate America has. The presidents of five unions have established the New Unity Partnership, which advocates a massive reduction in the number of unions — from 63 to 15 — with those remaining to be divided clearly along sectoral lines, such as hospitality and construction.

McClung v. Employment Development Department

Fair Employment and Housing Act amendment imposing personal liability on nonsupervisory employees for harassment of coworkers, following Supreme Court ruling that there was no such liability under existing law, changed rather than clarified the law notwithstanding legislative declaration to the contrary.

The Supreme Court has some very harsh words for legislative overreaching in terms of retroactivity. Let's see if this affects the Salazar II / Carter dispute.

Supreme Court No. S121568.

Proposition 64 In Effect

Proposition 64, by law is now in effect, according to Cal. Const. Art. II Sec. 10(a). The UCL Practitioner, citing a defense lawyer's article, wonders whether it is retroactive. It is not. No section of Proposition 64 explicitly claims retroactivity and the California Supreme Court has just raised the bar on retroactivity.

See the following case summary if you doubt that.

Hiatus

I apologize for my unanounced hiatus. It was a busy week plus, of course, there was the election. I will post a first look at Proposition 64 soon.

Williams v. FreedomCard, Inc.

Noted briefly: failure to post surety bond or delcataion of indigency constitutes a waiver of the right to appeal labor commissioner's award of wages. Williams v. FreedomCard, Inc. 2d App. Dist No. B162880.

Newsom Joins The Fray

Wow.

San Francisco Mayor Gavin Newsom threatened Monday to join hotel workers on their picket lines today unless hotel owners end a four-week lockout and allow employees to return to their jobs for a 90-day cooling-off period.

The San Francisco Chronicle reports.

Quick Fact: Elections & Employee Time to Vote

California Election Code sections 14000 and 14001 require that employees be given time off to vote if there is not sufficient time outside working hours. If so, they should be paid for the time, up to 2 hours.

And guess what? You have to put up a poster—surprise!—10 days before (That means tomorrow!) to let employees know this.

The polls are open from 7am - 8pm.

* But here's something that might be new: delays at the polls. There have been problems with these in the voting going on already in Florida and elsewhere. If that happens here, it is possible that employees will have to come and go more than once. Hopefully we'll avoid most of the major problems here in California.

Smith v. Superior Court (L'Oreal USA, Inc.)

This is a good one. It's a clear rule that clarifies something that isn't facially obvious in the statute.

Individual hired for specific short term and for flat fee is not "discharged" within the meaning of Labor Code Sec. 201 when the specific term expires and is thus not entitled to be paid immediately" upon completion of the term nor to receive a "waiting time penalty" pursuant to Labor Code Sec. 203.

Duly noted. Petition DENIED. 2nd Dist. No. B176918.

Weintraub: End Employer-Based Health Care

Does Daniel Weintraub read CLEL? His editorial today says ...

The biggest problem with our current system is that it injects a third party - the employer or its representative - between patients and doctors and between consumers and their insurance company.

He claims that employer-based health care started as a way around wage-controls during World War II. [Is that really all there was to it?-CLEL]

Weintraub is writing this in the context of urging readers to vote no on Proposition 72, which would enmesh the practice of employer-based health care.

What's his suggested fix?

We can do this by taking a page from a policy that has proven successful in Switzerland: require every individual to have health insurance that covers at least catastrophic, or unpredictable, costs * * *People who are too poor to afford coverage would continue to get their care through government-subsidized or charity-based health clinics and hospitals. The working poor could get vouchers or refundable tax credits to help them transition to taking charge of their own health insurance purchases.

You've got a lot more selling to do, Dan. How would costs be controlled by consumers when they have to have the insurance? Isn't that a seller's market? How would you foster competition--FTC action? CLEL agrees that employer-based healthcare should go away; it's especially onerous on small employers; but for the economy needs healthy workers. Wouldn't these vouchers end up having a secondary market? How do you have enough competition in the health care market with each provider having a big enough pool? Isn't it a natural monopoly or oligarchy? We need more answers.

Happy Friday

The LA Times reports that ...

The national flu vaccine shortage has companies bracing for a surge in costly
sick days and lost productivity.

Lovely.

"Employment Laws Explore New Territory"

In this month's California Bar Journal, there is a pretty decent sized piece on employment law frontiers in California. (It does not appear to be online, at least for free).

I'm a little confused by this piece, because it talks about SB 796 and not the recent bill that just took a lot of the punch out of it. What's up with that? Also, is she implying that a bill can be retroactive without any indication, even implicit, that it is?

While there is no indication that this law is deemed retroactive by the legislature, it will likely be a familiar sight in all new employee claims against violating [sic] employers.

Why even mention retroactivity then? I'm not sure what the point of that is. She feigns an attempt at balance at the end with the very trendy "on the other hand" job. With those caveats, it's a good road-map to some of the new employment laws out there.

[CLEL notices that it is usually strikingly easy to tell when a piece is written by an employer side lawyer or an employee side lawyer, including the use of agit-prop. Is this the case in all branches of law? CLEL was a former bankruptcy jock-in-training, and doesn't remember the creditor/debtor divide being so obvious in prose like this.]

Slow News Week Picks Up!

Finally! Some interesting news... (in my narrow band here, anyway--the world is full of interesting news right now)

The Fresno Bee reports that the new workers' comp law is putting the squeeze on chiropractors:

Statewide, chiropractors say new limits on visits and much-stricter guidelines for treatment have resulted in as much as a 70% cut in chiropractic treatment.

A class action suit against Dennys restaurants can proceed, the Supreme Court ruled, according to California law, where vacation is earned wage. The Chronicle reports.

Denny's allows employees to start earning vacation time from their first day of work, but doesn't pay them for accrued time if they leave in less than a year for an hourly employee, or less than six months for a salaried employee. Gard said the policy violates California law, which considers an employer's vacation benefits to be the equivalent of wages that can't be forfeited.

Yikes! CLEL would never have counseled them to do that. Dennys argued that their vacation plan was covered by ERISA.

Jesse Jackson spoke to striking hotel workers in San Francisco yesterday, the Chronicle reports. Mayor Newsom asked for a cooling off period, where workers would return to work during negotiations. A federal mediator will be in later this week. The strike is about a rise in health care premiums to be paid by the workers.

Noted Briefly...

I've decided that I will note cases in passing even if I'm not going to summarize them. This still doesn't mean that I will list here every single case that comes down in this and all ancillary areas...

Carter v. CB Richard Ellis, Inc. - 4th Dist.

N.B. New E-Mail Address

Why pay?

Train Thyself! & Hotel Strike at a Stalemate

The Governor did not veto a bill (AB 1825) requiring sexual harassment training for supervisors in companies with more than 50 employees. It does not go into effect until 2006. [CLEL notes that anyone expecting a veto on this one only need look back to the recall campaign - does he really want to revive the groping meme? Plus, how many companies with 50 or more employees aren't already doing this? Apparently not enough for Gov. Schwarzenegger to think this is a "job killer."]

Back to the front ... in San Francisco, the hotel strike continues, as the SF Chronicle reports. You'll never guess what the sticking point is. . .

The hotels have asked for a five-year contract that would sharply increase
workers' health insurance premiums. The union wants a two-year contract that would expire in 2006, which would synchronize its next round of negotiations with talks in other cities.

Health insurance? I can't imagine that. CLEL doesn't have a solution for this, but recognizes one is needed!

SF Hotel Lockout Imminent

The SF Chronicle reports.

California Fair Employment & Housing Comm. v. Gemini Aluminum Corp. 2d A.D. B165771

When the employer failed to reasonably accomodate its Jehova's Witness employee's wish to go to a religious convention that was held to be a form of study or worship, without reason, the Court held that the employer was in violation of the FEHA.

Judgment REVERSED.

Vetonator Part Zwei

Gov. Schwarzenegger vetoed two "off-shoring" bills, AB 1829 (preventing any state work from being moved overseas), SB 888 (no moving homeland security work offshore). The Sacramento Bee reports. The Governor, however, shored-up the Foie-Gras technology industry here in California.

And just in case you need a laugh because it's not Friday yet... read this. The Money Quote? "The third time it came in, I lassoed it and dragged it outside. . ."

Earthquake Blogging

Here on the Central Coast, things are so good that our karmatic balance has to be restored by something. Nature, apparently, has chosen serial 6.0 earthquakes. As far as I know, no buildings have collapsed this time.

On to the news. . .

In the hotel labor dispute, the owners have accused the union of not bargaining in good faith. The LA Times reports.

Labor Costs Rising

The WSJ (Sub. req'd) has this piece on rising labor costs. Since in real terms, wages have gone up infinitesimally in the last 30 years, it must be the overhead. The piece says its lower productivity and health care costs.

Welfare Capitalism

Today's Slate has a piece on the demise of what the author calls welfare capitalism. Free marketeers have thus far opposed things like socialized welfare--but would it be easier for most employers to not have to deal with this and pensions, etc.?

So, imagine you didn't have to deal with Workers' Compensation because, well, they're covered. Hmmm...

It's not exactly the GI bill but ...

The Bush administration proposed new regulations Monday aimed at clarifying employment protections for veterans and reservists returning from active duty. The Labor Department initiative was announced as Democrat John Kerry stepped up his criticism of President Bush on Iraq.

The NY Times reports.

[CLEL has a policy of withholding opinions on things like this, but CLEL will bend this rule to say that CLEL hopes that we don't hear shrieks of unfairness about this one from certain shrill and alarmist practitioners out there.]

Upcoming BASF Meeting on 96(k)

The Bar Assn. of San Francisco is holding an event next week that I'd very much like to attend. Unfortunately, I probably won't be able to make it. If anyone reading this is going and would like to give me notes, please let me know.

Labor Code Section 96(K): A Dramatic Modification of Employment at Will, a New
License for Lifestyle Liberty, or Just Another Procedure to Assert Already
Established Rights?Labor and Employment Section: Program

The Veto-nator.

As predicted here at CLEL, Gov. Schwarzenegger vetoed the minimum wage hike bill. The Bee reports. [CLEL will go out on a limb an predict the Legislature will attempt--and fail--to override this veto.]

Also vetoed were SB 1056 requiring "economic impact reports" before big box stores could come in.

Friday news

In the ongoing hotel/worker labor dispute, the hotels have locked out the laundry worker. The LA Times reports.

Slow week

Dear Readers:

I was sick earlier this week and now I will be hustling to catch up that time. The posting will be light. I expect there might be one case or two coming down that I will want to note. I'm also continuing to see what legislation is signed by the governor, what's going on in the labor conflicts going on right now, and, also the NHL lockout, which I think may be a paradigm-establishing conflict.

Card checks.

NLRB may rule ahead of the election on card-check certifications. The LA Times reports.

Motevalli v. Los Angeles Unified School Dist. Second Appellate Dist. No. B165380

[Just in case it wasn't clear. . .—Ed.]

". . . no cause of action exists for tortioius nonrenewal of an employment contract in violation of public policy."

Judgment below AFFIRMED.

Prachasaisoradej v. Ralphs Grocery Co. 2d Dist. Case No. B165498

The court held that a claim arising from Ralphs' allegedly bad calculations of bonuses arising under the Labor Code and the UCL, and not under a CBA, were not preempted by section 301 of the LMRA and NLRA because the rights arising under the Labor Code are wholly independent of any rights provided by a CBA.

Dismissal is REVERSED and REMANDED.

Read it here.

Post Labor Day News Wrap

Norcal grocery negotiations are ongoing, looking to avoid Socal situation. The San Jose Mercury News reports.

The San Diego Union-Tribune reports on the on-going problem of workers returning from Iraq to find their jobs gone.

The rest of the country is having issues with the new OT rules. The WSJ (sub. req'd) reports.

And, the most important issue facing the Governor this month: The Ferret Liberation Act of 2004!

Job numbers

So much in life is what you expect. The same result can be a disappointment to some and a boon to others. Since we've had a very bad year in terms of job growth, 144,000 new jobs all of a sudden looks like a big number (and indeed it was over 4 times last month). It's not. Don't deceive yourself. It doesn't even make up for population growth.

CLEL hase been pondering the effect this has on our practice. If anyone has some thoughts, please post a comment. It seems to CLEL, when there is a job shortage, it's clearly to the advantage of the managment side in a labor negotiation; in "employment" law, however, the less jobs are available, the more likely you are to see the recently departed file for any money available. An unusual contradiction for practitioners of "labor and employment" law.

The Labor Battle of the Decade?

I was going to say century, but that would really be stretching it. Plus, I know that professional athletes hardly conjure the labor strife of 100 years ago, but the NHL battle coming up may have a touch of everything.

I have to admit, though, that the NHL labor talks are extremely high stakes. Literally--not rhetorically--the future of the league is riding on the outcome.

Yet another round of talks are going nowhere. The owners' stategy has been suggested to be to aim for a labor impasse and unilaterally impose their hard cap next year. The current CBA will expire one day after the World Cup finale, on 9/15.

If you are unfamiliar with the NHL labor dispute, it's a little more complex than the usual millionaire versus billionaire conflict of major sports. First and foremost, the NHL's popularity has plummeted in the last ten years. Teams have been added in areas where hockey is not a traditional sport, instead of putting more teams where it's sure to be popular. There have been several bankruptcies of late, yet no contraction.

Since CLEL purports to track California labor law issues, it's worth pointing out that the California teams have been very successful of late. San Jose was in the final four this year, and Anaheim went to game 7 of the final before losing. But they haven't had the attendance you might expect from championship caliber teams.

CLEL will continue to follow this brinksmanship.

No Compromise on UCL

Via "The UCL Practitioner": SB 185, the legislative compromise on the UCL, failed to make it through the last minute rush at the State House.

CLEL did not favor the chances of SB 185, as it was last amended, passing. If for no other reason than the exemptions in it.

SB 185 Fails?

I didn't see anything in the papers, and likewise, the status page says it was never enrolled, and they've had a day to update--probably lots of updates today though.

So, as far as I can tell, SB 185 didn't make it. (Please comment below if you have further info.)

Let the brinksmanship begin.

More Movement on SB 185

Yesterday, the Assembly further modified SB 185. The notification provision of the earlier amendments weren't that exciting. This adds

• Court review of settlements for suits brought on behalf of the general public. The procedure for the review is set out.
• Unions and nonprofit legal services are exempt from court review of the settlements.
• A notice provision. (You have to send the defendants a poster! Oh, the irony--it has to be 14 point or else you get reported to the Labor Commissioner The State Bar).
• Party must plead injury in fact for restitution, unless plaintiff is a nonprofit, union, or nonprofit legal service.

So, it's basically Prop. 64, minus some standing requirements, with exemptions for certain kinds of groups.

Sav-On Class Action

The big news, apparently, is that the California Supreme Court approved the certification of a class in Sav-on Drug Stores, Inc. v. Sup. Ct. (Rocher). The Times also has an article. So does the Chronicle.

Both sides respond with talking-points answers. The labor side says that, because the enforcement agencies are underfunded, this is an important decision—CLEL doesn't know how agency funding relates legally to the presence or non-presence of a procedural device. Industry responds, predictably, that this will send more jobs away from California. This talking point is losing credibility over time, when San Bernardino county's net job growth in July was almost equal to that of the entire United States.

SB 185 Amendments

SB 185 has been amended. It adds B&P section 17203.7 requiring submission of private complaints to the Attorney General within 10 days of filing.

And that's it. . .

I'm not sure this is really what they're proposing as an alternative to Prop. 64, but this is how it stands right now, on its way to the judiciary committee.

Min Wage Hike "News"

The Orange County Register runs a story claiming that the Governor is expected to veto the minimum wage hike, but doesn't say who is expecting it. And only ads the Governor's campaign promises and his support from business as reasons why. While CLEL agrees that a veto is likely, CLEL doesn't appreciate this kind of reporting.

Legislative Marathon Continues

Lots of news today...

The minimum wage bill (AB 2832) is headed for the Governor's desk. The LA Times reports.

Another bill, one that slipped through CLEL's wide legislative scans (guffaw) is also headed for the Governor's desk. This one (SB 1841) requires employers to notify employees before monitoring employee email or tracking employee web site use. The Chronicle reports.

Continuing the legislative marathon, an outsourcing bill (AB 1821) passes an heads for the Gov. This bill apparently goes against both industry and a PPI report on its beneficial effects for California workers. The Times reports.

[CLEL would bet on all three of these being vetoed, especially SB 1841.]

The Times has another article on UCL reform, but there is no actual change to the bill, SB 185.

The Bee has an editorial on the prison guards' CBA.

Happy Tuesday.

Last Minute UCL Movement?

The SF Chronicle reports this morning on the behind-the-scenes machinations between the Governor and legislators to amend the UCL without resorting to Prop. 64. The article mentions that the Sierra Club is involved in the talks, and that the Governor is trying to protect his "green" reputation but does not explain if this means the reforms will have special provisions for environmental protection only. There is still no movement on SB 185 (the gut and amend vehicle for the reforms) as of this writing.

The LA Times notes the new federal overtime regulations are now in effect.

AB 2832 Takes Next Step; UCL Reform Compromise?

AS MENTIONED Wednesday, the Legislature is considering enacting its own minimum wage hike. The Senate has voted on, and passed the measure, AB 2832. The 22-14 vote is not enough to get it passed a veto. The Governor has not taken a position yet. [CLEL notices in at least one place in the Labor Code, in Section 1194.2, the relief is granted as to any "payment of a wage less than the minimum wage fixed by an order of the commission." (Emphasis added.)—more work for the courts!] The Bee reports.

United Airlines is trying to cancel its pension plans. The LA Times reports.

Via The UCL Practitioner: "SB 185. . .is now slated to be reworked to include changes to 17200, the state's unfair competition law, according to sources familiar with the legislation." As of this writing, this change hasn't yet occurred. CLEL will keep tabs. [CLEL wonders what the chances of this going through are since money and efforts have already been spent on a stronger Proposition 64. That said, Prop. 64 is struggling mightily in early polls. Maybe that's all the leverage required.]

Legislative Marathon, Costco Sued

Costco was sued for sex-based discrimination. The plaintiff alleges that the company denies women promotions into the companies upper echelons. The LA Times reports.

With this year's legislative session winding down, legislators are churning out bills for the governor's review.

Remember when CLEL noted the shutdown of the IWC? Well, here's a bill to do one of its jobs for it. AB 2832 raises the minimum wage to $7.25 as of July 1, 2005, and $7.75 as of July 1, 2006. The last increase was in January 2002. There is not much chance, based on national CPI numbers, that this increase would exceed inflation.

Carter v. Department of Veterans Affairs, 4th App. Dist., Case No. E030908

This case should teach all who read it the value of a good legislative intent research firm.

The Court of Appeal held that the legislative amendment rejecting the Salazar interpretation of sexual harassment liability under FEHA was not retroactive. The Court held also that this amendment was not a mere clarification, but, rather was a change in the law because it changed the possible liable parties to only employers and the possible bases of harassment from any FEHA-prohibited kind to only sexual harassment.

We find that applying the amendment retroactively is constitutionally objectionable. Constitutional considerations of due process require that citizens be fairly apprised of laws affecting their conduct. Here, the import of the amendment is to impose substantial new obligations on employers, and to impose such liability, without clear notice, for conduct which was already completed in the past.

Judgment of of the trial court is REVERSED.

Reeves v. Hanlon Cal. S. Ct. No. S114811

The California Supreme Court holds that interference with an at-will employment contract is properly analyzed as a tort of interference with a prospective economic advantage (i.e. does not require the existence of a contract) because the interference has to do with the future relationship.

Judgment AFFIRMED. (Unanimous)

The SF Chronicle has this report on this case.

California July Job Numbers

While the United States as a whole added an anemic 32,000 jobs in July, California actually lost 17,300. The LA Times reports.

California's employers went into a hiring funk in July, cutting a net 17,300 jobs and raising concerns that the state's economic recovery has lost steamalong with the nation's.

On the other hand, some areas of the state showed improving prospects, including surprisingly, the East Bay (The Contra Costa Times reports), and, not surprisingly, the Inland Empire (the Riverside Press reports) and the Central Valley (the Fresno Bee reports).

The Inland Empire added 25,900 jobs in July, almost equal to the entire net growth in the US.

Haney v. Aramark Uniform Services, Inc., 5th App. Dist., Case No. F042980

The Court of Appeal held that just because plaintiff alleged that he engaged in what might be termed "concerted activity" (and therefore subject to the NLRA) when he tried to discourage fellow employees from going along with a fraudulent business practice, because interpretation of the CBA was unnecessary, that a cause of action for termination in violation of public policy could stand.

Judgment in favor of Defendant is REVERSED and the case is REMANDED.

Guv signs Sue Your Boss Reform

Another piece on the "Sue Your Boss" reform from the Bee [which I'm becoming a bigger and bigger fan of—CLEL] on the occasion of its being signed into law.

Comment: With respect to both the "Sue Your Boss" law and the Unfair Competition Law (up for reform as Prop. 64), none of these reports have asked the question as to why it wasn't just simpler to fund the responsible agencies. CLEL can guess why, but would like to hear it from the legislators themselves.

Bay Area grocery unions are calling for boycotts if the supermarkets call for benefit reduction. The Contra Costa Times reports.

Labor relations news; Fed hike.

Yesterday, the Fed hiked the federal funds rate 0.25% to 1.5%. CLEL was stunned. The Fed states that its decision is based its observation that oil prices, and not a fundamental problem with the economy's growth caused the recent employment number. The WSJ reports (sub req'd.)

In other news:

The LA Times reports that LA Hotel workers are requesting a federal mediator.
The LA Times reports that a Wal-Mart is alleging a UC study was Union funded.

Happy Tuesday News.

Daniel Weintraub has this opinion piece in the Sacramento Bee about the history of the "sue your boss" law, SB 796.

Dan Walters has this report in the Bee about what's on tap for the rest of the legislative session.

[The Bee is out ahead of all of the state's papers on legislative coverage in my opinion.]

And, completing the hat trick, the Bee has this article on the Northern California grocery labor talks.

Slow News Day

Slow news day. Nothing catching CLEL's eye today. The legislature's Labor & Employment Committee is meeting today. We'll see what they come up with.

July Numbers Disappoint

The Sacramento Bee reports that "Workers' comp savings not yet felt."

The big news of the day is the latest jobs report showing anemic job growth in July, and revising June and May numbers down as well, the NY Times reports. Only 32,000 jobs were added in July according to the benchmark household survey. 150,000 jobs are required monthly to keep up with population growth. This result reflects about 15% of the results economists were expecting. Read the economists reactions in the WSJ (sub. req'd) [N.B. the more sanguine analysts argue that the actual number of jobs gained was higher, more like half-way in between the Establishment and Household data, but the Household survey continues to be the benchmark.—Ed]

NHL Labor Woes

On a slightly different note ...

The NHL is having its own labor woes. After a lockout shortened the 1994-5 season to just half a season, they parties are back at it this year. The players refuse the league's demand of a salary cap. NHL players earn 76% of revenues in salary, higher than any other major sporting league in the US. The latest talks today went nowhere, the AP reports.

(There are three NHL teams in California. The San Jose Sharks, Western Conference Finalists in 2003-4, the Anaheim Mighty Ducks, Western Conference Champions in 2002-3, and the Los Angeles Kings.)

California Performance Review Highlights

The CPR states that:

The variety of programs responsible for unemployment insurance, workers’ compensation and occupational health and safety frustrates businesses attempting to comply with the law and workers that deserve benefits. In addition, the duplication of administrative functions results in additional and unnecessary costs to the state.

It proposes the following fix:

...the Department should have an office that integrates all of the various appellate programs—Unemployment Insurance, Workers’ Compensation and Occupational Safety and Health [and Fair Employment & Housing (see chart)]—to ensure that decisions are fair and consistent and provide flexibility in assignments to prevent backlogs. The Department should centralize administrative support functions to ensure that all the operating divisions concentrate on achieving program success.

It this happens, we could see some major changes in procedures, because these different agencies work quite differently. The mostly ministerial changes proposed to the Labor Code are here.

NLRB Criticizes Nurses' Bedside Manner

The Los Angeles Times reports that the NLRB has thrown out a vote to unionize by nurses at Cedars-Sinai Medical Center because of intimidation tactics.

Norcal Grocery Strike?

The Sacramento Bee reports :

Four Northern California supermarket chains and Local 588 of the United Food and
Commercial Workers are scheduled to resume labor talks Monday, while the union's
members continue to work under terms of a day-to-day contract extension that so
far has averted a strike.

SB 1809, as enrolled: first look.

SB 1809 provides for the follwing

• A redistribution of civil-penalty civil actions to 75% to the agency for eduction, and 25% to the employee.
• Procedural and administrative requirements for proceeding with the suit. For most violations, written notice to the Labor and Workforce Development Agency is required. If they investigate and give a citation, no lawsuit can commence. Other violations (there is a long list in new LC 2699.5) can be "cured" after written notice, but only three times per year.
• Gives judges discretion to lower award amount.

  "a court may award a lesser amount than the maximum civil penalty amount
  specified by this part if, based on the facts and circumstances of the
  particular case, to do otherwise would result in an award that is unjust,
  arbitrary and oppresive, or confiscatory." [new LC 2699(e)(2)]

• Repeals requirement for filing any signed application with the DLSE (LC 431).
• It amends LC 98.6 to include an anti-discrimination clause for employees who enforce these laws.

There are two retro-activity clauses, one for the posters and one requiring the court to supervise any settlements.

Read this blog on My Yahoo.

Just in case you haven't noticed, I thought I'd point out a new feature of My Yahoo that is quite excellent. If you click on 'choose content' and add RSS Headlines (BETA), you can then get all of the headlines from this blog (and most others) listed as a news item in your Yahoo page. You can also use this "syndication" feature with any RSS aggregator, including http://www.bloglines.com
The URL is http://calemploymentlaw.blogspot.com/atom.xml

Reeves v. Safeway Stores, Inc. 6th Dist. No. H024375

The Fair Employment and Housing Act, Government Code sections 12900 et seq. (FEHA), prohibits an employer from firing a worker in retaliation for the worker’s complaining about incidents of sexual harassment in the workplace. (Gov. Code, § 12940, subds. (h), (j).) An employer can defeat such a claim by showing that it acted not in response to the worker’s complaints but for legitimate, nonretaliatory reasons. This case presents the question whether an employer may be liable for retaliatory discharge when the supervisor who initiates disciplinary proceedings acts with retaliatory animus, but the cause for discipline is separately investigated and the ultimate decision to discharge the plaintiff is made by a manager with no knowledge that the worker has engaged in protected activities. We hold that so long as the supervisor’s retaliatory motive was an actuating, but-for cause of the dismissal, the employer may be liable for retaliatory discharge.

Summary Judgment in favor of defendant REVERSED.

SB 1809 Passes

The changes to the "Sue your boss" law have passed the Legislature as part of the budget deal. It will take effect immediately upon the Gov's signature, which is expected tomorrow. CLEL will break down the changes next week.

SB 769 and the budget; Ralphs NLRB problems

• The Sacramento Bee has a report on the effect of the SB 769(aka "Sue Your Boss" or "Bounty Hunter" statute) compromise in the budget (which has passed the Assembly).

The compromise forbids employees from filing lawsuits against companies that do not post signs explaining workers' rights. The exceptions are posters regarding payroll and worker-injury laws.
For more serious problems, including violations of the wage and hour laws, a worker can still sue - but the employer is given a grace period to fix the problem first. The worker must inform the employer and the state of the problem, and if nothing's done, the worker can go to court. Depending on the type of violation, the grace period can last 150 days, Dunn said.

According to the report, this is a version of Dunn's own amendment to SB 769, SB 1809. 

• The San Jose Mercury news reports less than half the anticipated number of workers have taken advantage of the Family Leave Act.

• Ralph's apparently hired back some of its striking workers during the strike, the OC Register reports.

The allegations were first raised by the United Food and Commercial Workers union, which sued Ralphs in January, alleging that the company had illegally rehired more than 200 employees under false names and Social Security numbers after the workers were locked out in October.
Ralphs later confirmed that it was cooperating with a U.S. Justice Department probe of the allegations and that a federal grand jury had been convened to hear them.
The union's suit was dropped as part of the February settlement that ended the lockout. However, a National Labor Relations Board inquiry into the allegations is continuing.

The fallout from the grocery strike continues...

Legislative/News Round-Up

AB 3051, relating to workers' compensation and death benefits for firefighters is up for a second reading after being approved in one committee.

SB 1521, the Displaced Janitor Opportunity Act, vetoed by the Governor, is up for override in the Senate, if they get to it.

Nothing else significant to report in the news this morning.

Nyulassy v. Lockheed Martin Corp.

The Court of Appeal (6th Dist.) handed down a decision today affirming a trial court's finding that an arbitration clause between employer and employee was unconscionable when the agreement required only the employee to arbitrate all claims against the employer, required the employee to have discussions with his supervisors before filing for arbitration and a 180-day time limit.

Order denying defendant's motion to compel arbitration AFFIRMED.

Nyulassy v. Lockheed Martin Corp., Cal. App. 6th Dist. No. H026704

Bounty Hunter Law Compromise in Budget Deal

The LA Times reports this morning that there are changes coming to the bounty hunter law in the budget deal.

After weeks of resistance, Democrats finally agreed to weaken what the GOP has dubbed the "sue your boss law." That law allows workers to file multimillion-dollar lawsuits against their employers for a variety of offensives — some of them as small as using the wrong size type on posters that inform employees of their rights.The compromise would allow employees to sue for major violations, but only if the Labor and Workforce Development Agency refuses to act. And Democrats agreed to prohibit any suits for such minor violations as failure to post labor rules.

The deal hasn't been voted on yet, and may face opposition by fiscal conservatives and some liberals, with the center suppporting it, but chances are this deal goes through. The law's original author agreed with the changes.

Sen. Joe Dunn, D-Garden Grove (Orange County), said he was always open to changing the law to prevent frivolous lawsuits. "This law was never about lining the pockets of trial lawyers, it was about enforcing the labor code," said Dunn, who wrote the original law.

This change will bring Labor Code enforcement suits more in line with other kinds of employment related disputes by apparently requiring administrative review first. I haven't seen the text of the proposed amendments yet.

More to come...

News Summary

• George's Employment Blawg has this great entry on NLRA issues for companies without unions.
• The bounty-hunter law is still in the budget mix, according to the SF Chronicle.

Otherwise, another slow news day.

On the legislative front:

• a number of workers' compensation bills are in the conference comittee. SB 1071, AB 1215, AB 1578, AB 1579, SB 191, SB 223, SB 229, SB 354, SB 451, and SB 757.
• SB 1687, an act pertaining to advance-fee talent services, which would amend LC 1701 to expand the definition of a"advance-fee talent services," received its third reading in the assembly on Saturday.
• SB 534, requiring long-handewd tools for agricultural workers was sent to the inactive file on Saturday.

Also,

News Update

The SF Chronicle reports that the "bounty hunter" law is still in the mix on the budget deal; and public employee unions take the offensive against Republicans on the budget.

Legislative update: While I'm still a novice at reading the legislative information, there doesn't appear to much of interest going on right now. I'm keeping my eyes on a few bills that were vetoed that are up for override, but they don't have the votes. We'll see.

 

(slow) News wrap

Slow news day, folks. Too bad this isn't a criminal law blawg, or I could post until Christmas on Blakely (which even has it's own blawg!)

Update blawg info

I've decided that this new template looks tons better. It seemed like the logical time to do this, since a rebuild was in order.

My name is Jon Storm. I practice labor and employment law in San Luis Obispo, California.

Coke Strike

The San Diego Union-Tribune has this report:

About 500 Teamsters yesterday struck the Coca-Cola Bottling Co. of San Diego after four months of negotiations failed to achieve a new union contract. The key issue in the dispute is health care costs for workers, the union said.>

Yet another strike over health care costs.

Coming soon: legislative roundup

I had intended to begin doing a "legislative roundup" every few days this week, but the leginfo.ca.gov site is refusing to cooperate with my plans.

Perhaps worth noting is that State Senator Martha Escutia (D-Whittier) is leading in the race to be the next President Pro-Tem. Sen. Escutia held the failed compromise talks over UCL reform.

Time has not yet permitted me to get on top of all of the bills currently before the legislature that might impact the Labor Code.

Labor Market Summary

Steven Roach of Morgan Stanley has this summary of the labor market.

We hear repeatedly that the disconnect is all about lags or productivity. I don’t buy it. Instead, I believe that a new force has come into play that is now altering the fundamental relationship between domestic demand and domestic employment in the United States. I call it the global labor arbitrage — the IT-enabled efficiency tactics that allow US companies to substitute high-wage domestic workers with like-quality low-wage foreign workers in goods producing and services-providing functions, alike. The lack of pricing leverage in today’s climate makes this arbitrage an increasingly urgent competitive imperative. In my view, the global labor arbitrage is likely to be an enduring feature of the macro climate — raising the distinct possibility that subpar job creation in the US could well be here to stay for the foreseeable future.

Students Bring Class Action Disability Discrimination Suit.

SFgate has this report.

Would-be California medical students with learning disabilities filed a discrimination suit Monday saying their prospects of becoming doctors are being thwarted because they aren't given enough time on the medical school entrance exam.

The suit arises under California law in Alameda Superior Court.

3d Cir.: LMRA Shields Attorneys From Malpractice

A lawyer hired by a union to represent one of its members in an arbitration hearing cannot later be sued by the worker for malpractice because the federal Labor Management Relations Act effectively immunizes the lawyer from such a claim, the 3rd U.S. Circuit Court of Appeals has ruled.

The Legal Intelligencer has this report.

News Roundup

The WSJ (sub. req'd) has this report: CPI up, wages flat; and this piece on legal weblogs. No mention of CL&EL (; Also, Boeing settles a sex-bias suit.
 
Will Wal-Mart get caught up in this settlement trend? [Not unless it really starts looking bad is my guess.]
 
The Sacramento Bee has this report on the status of State Fund going forward after the Schwarzenegger work/comp reform
 
Port business is boom, swelling the ILWU's ranks. The LA Times reports.

Brown University, NLRB No. 1-RC-21368

Last week, the NLRB handed down a decision reversing their decision in NYU holding that graduate students are "employees" at private universities (NLRA doesn't cover state employers.)
 
The central rationale seems to be that the relationship between students and the univeristy is "educational" and not "economic." (Does this problematize post-doc fellowship appointments, etc.? are professors on tenure-track "primarily economic" in their relationship vis-a-vis a university?)
 

State Budget Hinges--in part--on "bounty hunter" law.

The LA Times has this report:

Many GOP lawmakers say they won't support a spending plan unless the Legislature repeals what they call the "sue your boss" law, which this year expanded opportunities for workers to file lawsuits against employers.

News Roundup

* Here's a novel legal theory: "Protester Tells Court: Wages Aren't Taxable." The LA Times has this report.

* Morgan Stanley settles a sexual discrimination suit minutes before trial. They agreed, in the consent decree, to outside monitors on gender bias, and increased training against discrimination. The WSJ has this report (sub req'd);

Agosta v. Astor, 4th. Dist. No. D04220

This ruling continues contouring the doctrine of at-will employment and its relation to contract-relationship torts. Unlike the covenant of good faith and fair dealing, which does not lie when an at-will employee is terminated, the employer cannot avoid tort liability for fraudulent inducement just because the employee's relationship with the employer is at-will.

News Roundup

* The Contra Costa times reports Bay Area wages are growing more slowly.

* The LA Daily news reports has an interesting, two-sided report on UCL reform. (See this piece, via The UCL Practiioner, from the San Jose Mercury News rounding out the donations.)

[Ed: Industry seems to support turning UCL into class-action like lawsuits. There doesn't seem to be much focus on the issue of whether or not private attorneys-general are democratically accountable.]

* Not much legislative action lately because of the budget impasse.

* The aforementioned potential port strike was averted. The LA Times has this report.

Ninth Circuit Myth Exploded

The Sacbee (via Howard Bashman) has this article:

Despite a few attention-grabbing reversals - as when the Supreme Court threw out the circuit's ruling against "under God" in the Pledge of Allegiance, for example - about one in four 9th Circuit decisions reviewed by the high court met with its approval. Only four of the nation's 13 circuit courts did better. Six had 100 percent reversal rates.

The Ninth Circuit has been more ideologically balanced for years.

Minimum Wage

This article in Slate examines the recent minimum wage studies and suggests that earned-income tax credits are a prefereable measure.

Longer Hours, Not Higher Productivity Enriches America

According to this article it today's WSJ (sub. req'd).

It's otherwise been a slow week.

Another Port Strike Looms

LA Times reports labor contract talks between industry and labor broke down last weekend. At issue: internet software that allows customers to bypass the clerks.

The last port shutdown cost billions of dollars and has vast ripple effects.

Europeans Extending Workweek

A report in today's NY Times, here, reports that Europe--France and Germany at least--are extending their work-weeks, because experiments in lesser hours per week haven't reduced unemployment. The article does not explain the theory behind that macro-economic connection, and seems to suggest that competition from lower-wage countries has more to do with it.

Wage Growth Study

In an otherwise slow news day in this blawg's focal area, I found this interesting study:

California cities with best wage growth (nationwide):
(4) Santa Cruz
(6) San Luis Obispo
(10) San Francisco-Oakland.

California cities with worst wage growth:

(4) Stockton
(5) Modesto
(6) San Bernardino
(8) Bakersfield

This is an interesting study, but it would be interesting to see, assuming that inflation is otherwise equal nationwide, whether these wage trends beat the real estate market.

New MoFo Update

MoFo has a new labor & employment law update here, by James E. Boddy.

"A Revised Roadmap For Disability Access in California"

Labor Code 96(k) Interpreted

A number of labor & employment law cases were handed down by California Courts yesterday, but I think this one is most important:

Grinzi v. San Diego Hospice Corp. 4th Dist. Case No. D04231.

Without knowing the full facts of the case, or the position the lawyers were put in, it is somewhat unfair to say this, but, isn't it in the first week of Con Law that the First Amendment only protects against government intrustion?

An employee was term'd, according to her, for participation in the "Women's Garden Circile", according to the employer for unauthorized use of their e-mail system. Here's the beef:

By so specifying rights "otherwise protected by the Labor Code" and "under the
Labor Code," the Legislature has indicated an intention to limit the proscription against
terminations for the exercise of "any rights" to the exercise of those rights "otherwise
protected by the Labor Code." Further, the initial portion of section 98.6, subdivision (a),
proscribes terminations for several kinds of conduct delineated in "this chapter,"
including conduct under section 96, subdivision (k), and "Chapter 5 of Part 3 of Division
2," or filing claims or proceedings with the Labor Commissioner. (See fn. 10, ante.) As
such, these provisions only prohibit terminations for conduct "otherwise protected by the
Labor Code." In this context, the reasonable conclusion is the Legislature also intended
the phrase, "any rights," in the final portion of section 98.6, subdivision (a), to similarly
refer to rights "otherwise protected by the Labor Code." Consequently, for Grinzi's claim
to survive under this provision, she must allege her termination occurred because she
exercised a right protected by the Labor Code. As discussed, Grinzi does not allege she
exercised such a right.

Many had been reading 96(k)/98.6 to limit employee reaction to any outside lawful conduct. Narrowing it to include only rights protected by the LC is dramatic in that regard.

IWC Shut Down

The Sacramento Bee reports that the IWC is shut down for lack of funding, and lack of support from both parties.

In place of the commission, future decisions about the minimum wage, overtime rules and other working conditions will be left up to the Legislature. Some workers may also pursue lawsuits to enact changes.

We'll keep this one tabbed.

Employment Figures Disappoint.

The labor statistics for the month of June were announced this morning, and they were vastly lower than expected by forecasters. The NYT has this report, and the WSJ this (sub. req'd.)

The forecast of the unemployment rate holding steady were correct. Wage growth slowed as well. This figure represents a number lower than the oft cited 150,000 per month required to meet population growth. It is worth pointing out that recent polling shows worker less secure than economists in the ability of the market to create jobs. Score one for groupthink this month.

Job Watch (part of the Economic Policy Institute--a labor-side think tank) has some interesting stats on underemployment. The Heritage Foundation (a conservative think tank) paints a rosier picture:

Some analysts will see these numbers as a disappointment; they're anything but that. The economy continues to add jobs broadly, and continued growth and positive earnings should see this trend maintained for some time.

Proposition 64 Poll

According to The Recorder, via The UCL Practitioner, a poll shows voters favor Proposition 64.

Nothing on the website of the group sponsoring the proposition.

Janik case uproar

Blawgosphere is in an uproar over the Janik v. Rudy, Exelrod & Zieff case, which apparently will require B&P 17200 counts in business litigation.

The Legal Reader has this pro-reform comment here, and the pro-17200 UCL Practicioner site has this comment.

One argument raised by Rudy, Exelrod was that before the Cortez decision, there was no authority to support a UCL claim for unpaid wages. Slip. Op. at 16-17.

Before we all get carried away, please understand the procedural posture of this case. This case reversed a demurrer on the grounds that there was in fact a duty owed to certain class members; it is not an imposition of a fine or a judgment.

So, stay tuned.

Effect of Fed hike; jobs report on its way

All the papers have news on yesterday's Fed rate hike. The WSJ (subscription req'd.) reports that the Fed did an excellent job of preparing the economy for the hike, so effects should be built-in to any decisions at this point. Economists consider the rates to be approaching a neutral, non-stimulus, non-restraint level sometime in 2005. Labor costs are aceelerating.

The NY Times reports that jobless claims rose by 1,000 last week, and reports an economic forecast of 240,000 new jobs in June (report will be out this week.) Nevertheless, the unemployment rate should remain at 5.6%. Workers' earnings should rise about 0.3%.

Factory activity cools in June, prices rise in the WSJ (subscription req'd.)

---

What does it mean for lawyers?

Right now, the indications are that hiring is up, but perceptions haven't quite caught up with that. People will be working harder, but may be more litigious in times like these.

In tightening economies, employers have historically faced increased exposure for employment litigation and administrative investigations. Layoffs, reductions, and restructuring frequently trigger legal action. Our current economy is no exception.

--The Denver Business Journal, 3/15/02, citing EEOC data.