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Governor Has Bills Expanding Employee Rights On His Desk

September 5, 2017 By Israel Samuels LLP Leave a Comment

Yes, California has always been a favorable environment for employees. California employees have higher pay and more job protections than employees in most other States and far greater protections than those afforded by Federal law. The Governor has before him a whole litany of employee protections and all he need do is sign them into law. In fact, by the time you read this many may already have been enacted. At the time this article is written the following pro-employee bills are on the Governor’s desk (the signing deadline is October 15):

AB 1209: Assembly Bill 1209 requires employers with 500 or more California employees to provide the Secretary of State with information regarding (1) the difference between the median and mean salaries of male and female employees located in California who are exempt under the white collar exemptions; and (2) the difference between the median and mean wages of male and female board members who are located in California. The Secretary of State is to publish this information on a publicly available website.

AB 1008: We covered this Bill in detail in a prior issue of Business Briefs. The Bill prohibits an employer with five or more employees from (1) including on any employment application a question seeking disclosure of a job applicant’s conviction history, (2) inquiring into or considering an applicant’s conviction history until after extending a conditional offer of employment, and (3) while conducting a conviction history background check in connection with an employment application, considering, distributing, or disseminating information related to (a) certain arrests not followed by a conviction, (b) referral to or participation in a pretrial or post trial diversion program, and (c) convictions that have been sealed, dismissed, expunged, or statutorily eradicated.

AB 978: If enacted, this Bill requires requires employers to provide a copy—free of charge—to an employee, or to the employee’s representative, of the company’s injury prevention program within 10 days of a written request. The bill would authorize an employer to assert impossibility of performance as an affirmative defense to any complaint alleging a violation of these new provisions.

AB 569: This Bill prohibits employers from taking adverse employment action against employees or the employee’s dependents or family members for their reproductive health decisions, including the use of any drug, device, or medical service. An employer that violates this prohibition would be subject to penalties as well as provide to the employee reinstatement, reimbursement of lost wages and interest, and other appropriate compensation or equitable relief. The Bill also makes null and void any express or implied agreement waiving these requirements. In addition, employers must include a notice of these employee rights and remedies in an employee handbook.

AB 450: This Bill prohibits employers from allowing immigration enforcement agents to have access to non-public areas of a workplace, absent a judicial warrant, and would prohibit immigration enforcement agents access to, or review or receipt of, employee records without a subpoena or court order, subject to a specified exception. Employers must provide current employees with notices of an immigration agency’s inspection of I-9 Employment Eligibility Verification forms or other employment records within 72 hours of receiving the federal notice of inspection and provide affected employees a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms, upon reasonable request. The Bill also imposes substantial penalties to be paid to the State for violation of its provisions.

AB 168: This Bill prohibits employers from seeking a salary history from job applicants.

AB 46: This Bill expands the application of the California Fair Pay Act to private and public employees.

SB 306: Senate Bill 306 authorizes the Department of Labor Standards Enforcement to investigate employers, with or without a complaint being filed, when retaliation or discrimination is suspected during a wage claim or other investigation being conducted by the Labor Commissioner. If the Labor Commissioner finds reasonable cause to believe a violation has occurred, the Labor Commissioner is permitted to seek injunctive relief. In addition, the Bill authorizes employees to bring retaliation claims and seek injunctive relief upon showing that reasonable cause exists to believe the employee has been subject to adverse action for bringing the claim.

SB 63: Currently, California law provides parents who work for an employer with 50 or more employees up to 12 weeks of job-protected parental leave, including protection for their family’s health care coverage. Under this Senate Bill these basic job protections will apply to new parents in businesses with 20 or more employees.

Some Bills are more likely to be signed than others and California employers should start their legal compliance planning now if they have not already done so, With all of the uncertainty in California employment law it is essential that your business stay in contact with your legal counsel to assure you comply with all existing laws, as well as this year’s newly enacted laws.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.

Meal and Rest Breaks: Understand the Rules

August 28, 2017 By Israel Samuels LLP Leave a Comment

A common question from employers involves meal and rest breaks for employees. California sets its own strict rules when it comes to meal and rest breaks. However, it is up to employers to inform employees that they are entitled to both a meal break and paid rest breaks. Timing is everything because California employers must let employees take their meal break at the proper time.

“It is important for employers to remember that meal breaks have nothing to do with eating lunch. They are about providing employees 30 minutes of off-the-clock, duty-free time within 4 hours and 59 minutes from the start of their shift,” says Erika Frank, CalChamber executive vice president, legal affairs.

“Misunderstandings about California’s meal and rest break rules may expose employers to liability.”

It is imperative that business owners understand the law in order to prevent violations and stay in compliance with the law. If you, as an employer, have any questions or are confused about when and how to offer employees meal and rest breaks please check with your trusted advisor. This includes understanding:

Employer obligations for meal and rest breaks;
No on-call rest breaks;
Premium pay for meal and/or rest break violations;
Timekeeping and recordkeeping guidelines; and
Best practices to avoid compliance trouble.

We have seen many small business owners get into trouble for not understanding the requirements of when and how to offer employees meal and rest breaks, especially when the employee is not being managed on a regular basis. Don’t fall into this trap.

Minimum Salary Increase for Exempt Employees is on Senate Floor

August 21, 2017 By Israel Samuels LLP Leave a Comment

A bill which could have detriments effect on small business owners is currently on the Senate Floor which would accelerate the minimum salary threshold for exempt employees. If AB 1565 passes into law, it would significantly increase costs, especially on small employers. As written, AB 1565 could impose a $3,700 increase per exempt salaried employee on small businesses.

Currently, all exempt, salaried employees in California must earn no less than two times the existing minimum wage, plus satisfy the “duties test,” in order to be exempt from various wage and hour mandates such as overtime, meal periods and rest breaks. Due to the recent minimum wage increase as enacted by SB 3, all salaried employees in California also got an increase.

The California Chamber of Commerce has published a list of the minimum salaries for exempt employees in California under the current schedule of minimum wage increases. Please do not hesitate to ask us if you would like a copy of the schedule.

AB 1565 proposes to accelerate the salary increases by requiring all employers to pay an exempt employee a minimum of $47,472 on January 1, 2018. AB 1565 does not distinguish between employers with 25 or fewer employees and employers with 26 or more employees, as SB 3 did when enacting the scheduled minimum wage increases. Rather, the significant increase in AB 1565 is applicable to all employers. Under current law, small employers would not reach this threshold until 2020.

Under AB 1565, small businesses will face a $3,792 increase per salaried employee in 2018 and employers with 26 or more employees will face an increase of $1,723 per employee. There is no justification to increase costs on small and large employers by altering the schedule of increases for salaried employees already provided in SB 3. AB 1565 is awaiting a vote on the Senate Floor. If this effects your business, you are urged to contact your senators and tell them to oppose AB 1565.

Disregarding Business Entities Can Go Both Ways

August 14, 2017 By Israel Samuels LLP Leave a Comment

As business people and entrepreneurs, you probably are aware that a Plaintiff can attempt to disregard the corporate entity to collect directly from the individual. Colloquially, this is known as “piercing the corporate veil.” It can also be used against limited liability companies, it applies when the defendant company and individual have failed to maintain a distinct division between corporate business and personal business. Typically, the plaintiff is successful in holding the individual liable for the obligations of the business entity if the business entity did not observe formalities, was not sufficiently solvent, or had commingled assets and money with the individual’s assets and money.

There is another use of disregarding the separateness of the individual and the business. It is typically called “reverse veil piercing.” Sounds lascivious, doesn’t it? Its application was recently discussed and applied by the California Court of Appeals for the Fourth Appellate District in Curci Investments, LLC v. Baldwin (filed Aug. 10, 2017) Case No. G052764. Curci sought to add JPB Investments, LLC, an entity formed and held by James P. Baldwin, as a judgment debtor on a multi-million dollar judgment it had against Baldwin personally. The trial court rejected the addition of JPB Investments, LLC to the judgment since, in its opinion, “reverse veil piercing” was not available in California. The Appellate Court reversed. It found that here, where the debtor used the entity to avoid paying the judgment and that an unjust result would occur unless the entity’s assets could be used to satisfy the debtor’s personal debt, the entity could be disregarded and its assets used to satisfy the judgment. Thus, in California there is the potential to pierce business entities to reach their assets where their ownership and operation are used to avoid paying personal debts. The potential also remains for disregarding the business entity to make the owner responsible for the debt.

If you are trying to collect a judgment and believe the debtor is hiding his assets in business entities to protect them from seizure, call your legal counsel. There just may be a remedy for that.

You Can Do It Completely Right And Still Lose

August 7, 2017 By Israel Samuels LLP Leave a Comment

Let’s say you follow every procedural rule to the letter, read all of the applicable precedents and scrupulously follow them; and unerringly follow every appropriate procedure and policy in filing your action. What would you think if the Court of Appeals were to throw out your case because you should have anticipated that after you filed the case, the procedural law would change so you would have needed to start the process over. How would you feel? Angry, shocked, mortified by the insanity of it all?

To find out all you have to do is ask Blatt, Hasenmiller, Leibsker & Moore, LLC of Cook County, Illinois. The law firm filed a debt collection action against Ronald Oliva on behalf of a credit card company to collect on the debt owed by Oliva and won in the first municipal district of the Cook County, Illinois Circuit Court.

Thereafter, Oliva filed a federal suit against the law firm in which he claimed the firm had violated the federal Fair Debt Collection Practices Act since it had sued him in the first municipal district of the Cook County Circuit Court and he did not reside in the first municipal district. The law firm had relied on then valid Circuit Court precedent in effect at the time that was later overturned. The firm claimed that the filing under the prior precedent was the result of a bona fide error in the firm’s reliance on the then controlling law and the Fair Debt Collection Practices Act provided for a safe harbor for bona fide mistakes. The United States District Court for the Northern District of Illinois considered cross-motions for summary judgment, denied Oliva’s Motion and granted the law firm’s Motion on the basis that the now wrong choice of venue under the Act for the underlying action was a bona fide error by the law firm that entitled it to the safe harbor set forth in the Act. Oliva appealed.

The United States Court of Appeals for the Seventh Circuit reversed and remanded. It determined that the Fair Debt Collection Practices Act’s safe harbor provision did not apply to mistakes of law even if reliance on a court’s mistaken precedent was reasonable.

Thus, summary judgment in favor of the law firm was reversed and Oliva was allowed to further pursue actual damages, statutory damages up to $1000 per violation, and attorney fees under the Act based on the now, in retrospect, improper venue.

To quote William S. Burroughs – “As one judge said to another judge: be just. And if you can’t be just, be arbitrary.”

Expanded Employment Notice Required For Right To Take Domestic Violence Leave

July 24, 2017 By Israel Samuels LLP Leave a Comment

California, in its infinite wisdom, has expanded the notice that employers of 25 or more employees must give employees with regard to their right to take protected leave for domestic violence, sexual assault and stalking. Now, employers must inform each employee of his or her rights through a notice upon hire and at any time upon request.

Employers may use the Department of Labor Standards Enforcement’s notice. An employer need not use the DLSE’s notices, required to be, and available in English and Spanish, which are available on the California Department of Industrial Relations at this internet address: http://www.dir.ca.gov/dlse/DLSEPublications.htm. Employers may use their own notice although it must be “substantially similar in content and clarity” to the Notices offered by the Department.

See your attorney to ensure you comply with this new notice requirement.

Illegal Immigrant Report May Constitute Wrongful Employment Retaliation Even If Instigated By A Non-Employer

July 17, 2017 By Israel Samuels LLP Leave a Comment

Sometimes it does not pay to be clever, even if you are invoking the law. That is one of the lessons to be learned from the 9th Circuit Court of Appeals decision in Arias v. Raimondo (June 22, 2017).

Employee Raimondo worked for Angelo Dairy. The Dairy was aware that Raimondo was an illegal alien and used that information to keep him in their employ. Angelo sued the Dairy in California State Court for unfair competition, a variety of workplace, overtime pay, rest and meal period violations. However, to derail the action ten weeks before the trial in the state court action, the Diary’s counsel contacted U.S. Immigration and Customs Enforcement (“ICE”) and arranged with them to take Raimondo into custody at his scheduled deposition and remove him from the United States. The plan succeeded and ICE detained Raimondo. Based on the real threat of deportation Raimondo settled and released his claims against the Dairy.

Two years later Raimondo sued the Dairy, its owners and its lawyers, in Federal Court claiming that the defendants’ actions constituted retaliation for his workplace claims under the Federal Labor Standards Act. The U.S. District Court dismissed the case for failure to state a claim but, the 9th Circuit Court of Appeals reversed. It held that Raimondo had stated sufficient facts to constitute a claim for retaliation against the Dairy, its owners and its attorneys. It held, while only employers are liable for workplace violations, anyone, including the Dairy’s attorneys, could be liable for improper employment retaliation.

Moral of this story – bad facts make bad law. As one commentator has stated:

There are ethical rules that state that an attorney in California “shall not threaten to present criminal, administrative, or disciplinary charges to obtain an advantage in a civil dispute.” Lawyers who violate that rule or otherwise abuse their power, can be sanctioned, suspended, and even disbarred. There are also civil claims available for abuse of process and malicious prosecution. So there are penalties for this type of behavior already. However, giving plaintiff’s the right to sue their employer’s lawyers for retaliation will lead to far more problems than it will solve. Litigation is inherently contentious. Parties tend to dislike the lawyer on the other side. But in every other situation I know of, courts have ruled that there’s no right to sue the other side’s lawyer and that allowing such suits will lead to a multiplicity of litigation.

The 9th Circuit Court of Appeals thought otherwise and now, we are all at risk. To quote John Scalzi, ““The failure mode of clever is “asshole.’”

San Francisco Milks Employers So Employees Can Lactate On The Job

July 10, 2017 By Israel Samuels LLP Leave a Comment

On June 30, 2017, San Francisco enacted the “Lactation In The Workplace Ordinance.” It expands federal and California law regarding lactation in the workplace. If commercial lease rates in the City weren’t high enough, this Ordinance ensures that employers will
need more space.

Although California law requires employers to provide a reasonable amount of break time to accommodate employees and make reasonable efforts to provide the employee with a room, other than a toilet stall, in close proximity to the employee’s work area, to express
milk in private, and the Fair Labor Standards Act requires employers to provide a reasonable break time for an employee to express breast milk for one year after the child’s birth and in a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public. The Ordinance adds that the room be safe, clean and free of toxic or hazardous materials, contains a surface to place a breast pump and other personal items, have a place to sit and access to electricity; and have access to a refrigerator and a sink.

While the room may be used for multiple purposes, employees must be put on notice that lactation takes precedence over other uses for the room.

The Ordinance also requires every employer maintain a written lactation accommodation policy that includes the following:

A statement of the right to request a lactation accommodation.
A process for requesting an accommodation. This process shall:
- specify the means by which an employee may submit a request;
- require the employer to respond to any such request for accommodation within 5 business days; and
- require the employer and employee to engage in an interactive process to determine the appropriate accommodations.
- State that if in response to a request for accommodation the employer does not provide the accommodation, the employer must provide a written response which identifies the basis for denial of the request.
- Notice that retaliation in response to a request is prohibited.

The policy must be provided to employees when they are hired; must be included in any handbook; and must be provided to any employee who asks about or requests pregnancy or parental leave.

The Ordinance also imposes additional record keeping requirements on San Francisco employers. It requires employers keep records of employee requests for lactation accommodations for three years that include the employee’s name, the date of the request, and a
description of how the employer addressed the request.

There is a hardship exemption in the Ordinance. The requirements of the Ordinance can be avoided only if they would impose an undue hardship on the employer, such as requiring construction or reducing retail capacity or space.

We do not know to what extent the City is likely to enforce this Ordinance. We will continue to keep you abreast of all developments.

Accommodate The “Mark Of The Beast”

July 3, 2017 By Israel Samuels LLP Leave a Comment

Maybe this is taking workplace religious discrimination a bit too far.

In EEOC v. CONSOL Energy, a case out of the 4th U.S. Court of Appeals, the Court upheld a jury award of nearly $600,000 to a longtime employee of CONSOL Energy Inc. because of the company’s failure to accommodate the employee’s religious concerns about a handprint scanner. It seems employee Beverly Butcher, Jr. believed the Book of Revelation that the “Mark of the Beast” identified followers of the Antichrist and, through the mark, manipulated its followers. Butcher refused to use the handprint scanner since he
believed it could identify him as a follower of the Antichrist. Consol Energy made him choose between his job and use of the handprint scanner. Butcher thus retired under protest.

The EEOC sued on Butcher’s behalf – your tax dollars at work. The jury found the company had constructively discharged Butcher instead of accommodating his religious beliefs and awarded compensatory damages of front and back pay, lost benefits and lost wages. The Court of Appeals affirmed the judgment in its entirety.

Employers beware. If this Court’s interpretation is taken to its extreme employers could be liable for failing to accommodate some pretty bizarre religious beliefs. Just think, a Pastafarian Italian restaurant employee could sue his or her employer for being asked to serve spaghetti since it is an affront to their deity, the Flying Spaghetti Monster. Bizarre. Can we get a “Ramen” from our readers?

Can A Usury Claim Be Waived?

June 27, 2017 By Israel Samuels LLP Leave a Comment

In the California First Appellate Court case of Hardwick v. Wilcox, Wilcox made a series of usurious loans to Hardwick that Hardwick had, for the most part, paid. Wilcox, however, wanted more and tried to foreclose on property that secured the loans. Hardwick filed suit to recapture the usurious payments and stop the foreclosure.

Wilcox argued Hardwick had waived his usury claims since he had, in the past, paid the usurious interest rates demanded by Wilcox under the notes. The Appellate Court held usury cannot be “waived by the voluntary payment of excessive interest by the borrower.” The Court of Appeals, however, left open the possibility of waiver of a claim of usury in a written settlement agreement.

The Appellate Court also concluded that a debtor is not barred from recovering usurious interest payments that the debtor has already made at the time a lawsuit is filed. Such payments are held to apply to the reduction of principal. The Court further affirmed that “[w]here the lender brings an action to recover an indebtedness, none of the usurious payments, nor payments on renewal notes, are barred by limitation so as to preclude their use in the reduction of the principal debt.

Pursuant to California law, non-exempt lenders (the average individual) can charge a maximum of: (i) 10% interest per year (.8333% per month) for money, goods or things used primarily for personal, family or household purposes and (ii) for other types of loans (home improvement, home purchase, business purposes, etc.), the greater of 10% interest per year, or 5% plus the Federal Reserve Bank of San Francisco’s discount rate on the 25th day of the month preceding the earlier of the date the loan is contracted for, or executed. In other
words, the general rule is that a nonexempt lender cannot charge more than 10% per year (.8333% per month), unless there is an applicable exemption, and there are many.

If you charge or are being charged more than ten percent (10%) interest on any loan obligation, check with your legal counsel to determine whether you are a victim of usury.