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Consumer Background Checks on Job Applicants

December 23, 2014 By Israel Samuels LLP Leave a Comment

No specific law precludes an employer from conducting a consumer background check before making a job offer (this is distinguished from a criminal background check). However, many employers wait to conduct consumer background checks until post-offer/pre-employment.

There are privacy concerns that should always be kept in mind when conducting a background check, regardless of the time. One is the additional layer of privacy offered to Californians by the right of privacy guaranteed to them in the California Constitution. California zealously protects its residents’ privacy. It is considered an invasion of that privacy to dig into someone’s background, but the offer of employment, even if conditional, is considered a reason to do that search.

Additionally, if an employer conducts a pre-offer background check and uncovers certain private information, then makes an adverse decision accordingly, it can be considered a discriminatory action. An applicant’s age, race, religion, etc. can be discovered during such a check, and a claim of discrimination can be made if an adverse decision was made because of such protections.

If the background check identifies issues of concern to you, consider discussing the issues with the candidate as there are some background checks that come back with incorrect information. In today’s world of identity theft, it’s a best practice to give an applicant a chance to explain any problem, whether “pre” or “post” offer.

However you practice, it is important to be consistent in your policies. Random background screening is inadvisable, and can easily lead to a claim of discrimination. When developing your policies, it is best to consult with legal counsel.

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.

Is Email a “Writing”?

December 18, 2014 By Israel Samuels LLP Leave a Comment

In last month’s Business Briefs, we discussed the Statute of Frauds, which requires that certain types of contracts must be in writing to be valid and enforceable.

What about an agreement reached solely by email communications? The answer, under California law, can be found in the Uniform Electronic Transactions Act, beginning at Civil Code §1633.1 (enacted in 1999).

The good news is that, subject to varied and numerous exceptions, parties who exchange emails indicating that both of them have the intention of forming a contract based dominantly on their respective emails will almost certainly be deemed to have formed a binding and enforceable contract. Here are some of the key components of the ACT:

An “electronic signature” means an electronic sound, symbol or process attached to or logically associated with an electronic record (such as an email);
The parties should be explicit. Example of what might be included in an email: “This communication is intended by the parties to be a binding agreement when all parties have intended and agreed to be bound by it”;
A contract may not be defined legal effect solely because it is in electronic form, or solely because an electronic record was used in its formation;
If the law requires a contract to be in writing, and/or to be signed by the parties, an electronic record and electronic signature are deemed to legally satisfy that requirement.

Sexual Harassment Prevention Training

December 15, 2014 By Israel Samuels LLP Leave a Comment

As you probably know by now, California law requires companies with 50 or more employees to provide two hours of sexual harassment prevention training for all supervisors within six months of hire or promotion to a supervisorial position, and every two years thereafter.

But talk with any employer who’s been blindsided by a workplace harassment lawsuit: the costs are enormous, and even if you “win,” you lose because of those costs.

Even if you have less than 50 employees, investment in the moderate cost of such training could well yield a return in terms of lessening the possibility that you get hit with such a lawsuit.

And what if you’re small enough so that you have no staff designated as a “supervisor”? Maybe it’s worth your time and a few bucks to learn what conduct you personally should not engage in, to help avoid an accusation that you personally were engaged in sexual harassment. We recommend it: as we’ve said many times, an ounce of prevention can be worth a pound of cure.

CA Workers’ Comp Costs: Highest in USA!

December 11, 2014 By Israel Samuels LLP Leave a Comment

A recent study by the Oregon Department of Business and Consumer Services discloses that California employers pay the highest workers’ compensation costs in the nation – by a wide margin.

The study revealed that California employers pay 188% more in workers’ compensation costs than the national median and 33% more than the second most expensive state (Connecticut).

Some of the reasons:

California has among the highest medical costs per WC claim;
California’s rate of work injury claims per 1,000 workers is 46% higher than the national median;
California has a higher-than-average rate of “permanent disability” claims and an increase in claims involving cumulative trauma and those filed post-employment;
California’s system generally is more expensive to run because of higher-than-average litigation rates and complex administrative features;
…and more.

In 2012, the California Legislature “reformed” the workers compensation system by providing employers with new tools intended to reduce costs, decrease litigation, stem abuses, speed up the claims administration and make delivery of benefits more efficient. The projected “savings” from these measures were supposed to be applied toward reducing employer premium costs, but instead were misdirected to provide injured workers with nearly $1 billion in benefit increases.

It is clear that there is more work to be done in order to bring California’s workers’ compensation costs in line with what employers pay in other states. Until a wide variety of such changes are made, California is likely to prove to be a difficult state in which to “do business” in a cost-effective manner.

Obligations to Disabled Employees

December 8, 2014 By Israel Samuels LLP Leave a Comment

It is difficult for even the most diligent employer to know precisely the boundaries of the obligation to accommodate disabled employees. A recently unpublished court of appeal decision – Swanson v Morongo Unified – illustrates this point.

Swanson, an elementary school teacher, had recently been treated for breast cancer. She asked to be assigned to teach 2nd grade, as she had recently done, instead of being assigned to work with 5th graders. She contended that her fragile health made it difficult to do the added work a new assignment entailed.

But the school district assigned someone else to teach 2nd grade and assigned Swanson to teach kindergarten. She had not taught kindergarten in 30 years and expressed concern that, since the cancer treatments depleted her immune system, it would be dangerous for her to work with kindergarteners and the various illness they carried. The school district, however, refused to change the assignment.

Swanson sued claiming the district failed to accommodate her disability. The district argued that it fulfilled its obligation to offer reasonable accommodation, even if it wasn’t Swanson’s preferred accommodation.

While the trial court granted the employer’s summary judgment motion, the appellate court reversed, saying that the district violated the Fair Employment and Housing Act (FEHA) by not giving Swanson preference for the 2nd grade position and not going far enough to find a workable accommodation.

Here are some important reminders flowing from this case.

Disabled employees get preference for open positions, as long as they’re qualified and it doesn’t violate an established seniority system. This is true even if a non-disabled candidate may be more qualified.
In the vast majority of cases, an employee will be viewed more sympathetically than an employer. If the employee is a cancer survivor, that advantage can be huge.
The obligation to reasonably accommodate a disabled employee is an ongoing one. If an accommodation proves ineffective, the employer needs to resume the interactive process to identify other possible accommodations. Getting qualified legal guidance on this process is a lot cheaper than getting sued.

If there is any doubt in your mind as to whether a particular accommodation should be provided, your best action will invariably be to provide the requested accommodation.

“Wage Theft”

December 4, 2014 By Israel Samuels LLP Leave a Comment

“Wage Theft” is the term used now for employers who fail to understand all the nuances of California’s ridiculously complicated payroll laws. Mischaracterize an employee as an independent contractor (an issue state agencies can’t even agree on) and you’re labeled as a “wage thief.” Miscalculate an employee’s regular rate of pay? Ditto.

The “Wage Theft Protection Act” requires that all non-exempt, non-union employees be given a specific form at the time of hire. The DLSE has just updated that form to include information about paid sick leave. For your convenience, we’ve attached an updated copy of the new DLSE form to this issue of Business Briefs. You should start using it by January 1, 2015. http://www.dir.ca.gov/DLSE/Publications/LC_2810.5_Notice_%28Revised-11_2014%29.pdf

Paid Sick Leave

December 1, 2014 By Israel Samuels LLP Leave a Comment

California is now the second state in the nation to implement paid sick-leave state wide (Connecticut is the other). However, the Healthy Work places, Healthy Families Act of 2014 (“HWHF”) will not take effect until July 1, 2015, giving employers some time to plan ahead.

The HWHF is very broad in scope. It covers all employers regardless of size, with limited exceptions for union employees, construction employees, and providers of in-home support services. There is no small employer exception.

The union exception is limited to employees covered by collective bargaining agreements that expressly provide for: (1) wages, hours of work, and working conditions of employees; (2) paid sick days (with final and binding arbitration for disputes arising from sick days); (3) pay premium wages for all overtime hours worked; and (4) a regular hourly rate of not less than 30% more than the state minimum wage.

Like the San Francisco sick leave ordinance, the HWHF requires employers to accrue sick pay at a rate of “not less than one hour per every 30 hours worked.” The accrual begins on either the first day of work, or as of July 1, 2015 when the law becomes effective, whichever is later. For a full-time employee working 2080 hours per year (or a salaried employee), that would be 69.33 hours (8.66 days) per year.

Employees will be able to use that accrued sick time after 90 days of employment. Accrued sick leave can be limited to six days (48 hours) total, and an employer can limit carryover to three sick days (24 hours) each year.

Sick days can be used for the employee or a family member (defined as parent, child, spouse, registered domestic partner, grandparent, grandchild, or sibling). Time off can be used for illness or preventative care.

Employers with paid sick leave or paid time off policies do not need to change anything if their current policy:

Makes available an amount of leave that may be used for the same purposes as the new law (i.e. sick/family sick); and
Satisfies the accrual, carry over, and use requirements of HWHF; or
Provides for no less than 24 hours (3 days) of paid sick leave, or equivalent paid leave or paid time off per year.

There will be more to come on HWHF. We have a feeling the devil will be in the details. Get out your aspirin!

Oral Contracts: Are They Valid?

November 24, 2014 By Israel Samuels LLP Leave a Comment

It is surprising how many people think oral agreements are not valid or enforceable.

The correct answer is that oral contracts are entirely valid and enforceable, unless made invalid by a particulate statute or regulation.

Of course, a problem that can easily arise is figuring out what the terms are for a particular oral agreement, if the parties later disagree about what they initially agreed were the terms. Countless lawsuits, often very costly, have addressed the issue. A word to the wise: oral agreements are not recommended for situations involving (among other factors) considerable risk or financial exposure, or where they are expected to remain in effect for a long period of time, or where there are multiple or varying parties.

And what about those contracts requiring a written form? What are they? The starting point is referred to as the Statute of Frauds, that every state in the Union has adopted in one form or another (but not identical).

The Statute of Frauds is a descendant of multi-hundred year-old English common law, from which much of our state law in the U.S. was descended. In California, the Statute of Frauds appears in Civil Code §1624, and invalidates certain contracts “…unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent”. The law’s list of such contracts which must be in writing includes those that:

May not be performed within a year.
Guarantee someone else’s debt, with some exceptions.
Are leases for more than one year.
Are for the sale of real property or an interest therein.
Are agreements to retain someone as an agent to buy or sell real estate for you, or lease it for you for more than one year.
Are agreements that by their terms are not to be performed during the life of the promisor.
In most circumstances, are a mortgage or deed of trust.
Are a loan or grant of credit for more than $100,000, with certain exceptions.

In addition, other laws may define specialized situations in which a written agreement is required. For instance, the Uniform Commercial Code has such requirements for certain types of materials purchase agreements.

But what’s a “writing” that meets legal requirements? Is an unsigned email sufficient to create a binding legal contract? It’s an interesting question, with a complex answer. In California, that issue is addressed in the Uniform Electronic Transactions Act, beginning with Civil Code §1633.1. We’ll provide more information about that next month.

Business Contracts

November 17, 2014 By Israel Samuels LLP Leave a Comment

Your business lives or dies based on its contracts. With whom do you have business contracts?

Employees
Independent Contractors
Suppliers
Customers
Advisors
Landlord/Tenants
Government at a wide variety of levels

And that’s only a partial list.

As an astute business owner, manager or entrepreneur (which is why you’re reading this newsletter! ), you know that it pays to understand “contract law” as a guide to your contractual relations with others.

Sure, if a contract is complex and involves a lot of legal issues, you’ll probably ask your lawyer to draft it for you. But whether you do that, or pick up a “standard form” you came across a few years ago, you should not unconditionally accept what you read or are told. As with many areas of business activity, your understanding of “what’s behind the curtain” can help you enter into appropriate, effective and enforceable contracts that help your business grow in a profitable and productive manner, and also often serve to limit exposure and potential liabilities associated with certain types of contracts.

So, from time to time we’re going to bring up various “contract issues” here in Business Briefs, to help increase your knowledge base and familiarity with contract law. We would also welcome your questions about “contract law”. If they’re of a general nature, and raise an issue that we think many of our readers might also find interesting to learn more about, we will attempt to answer them.

Firing Employees Who Criticize Your Company

November 10, 2014 By Israel Samuels LLP Leave a Comment

Employers can sometimes lawfully fire employees for posting critical comments on social media (Facebook, etc.) about their company, even if limited to discussing only their own jobs, and even if the comments are posted on the employee’s own time and using their own computer system.

But that’s not always the case.

The National Labor Relations Act (NLRA) prohibits employers from penalizing employees acting as a group to try to improve the terms and conditions of their employment. Engaging in what the NLRA calls “protected concerted activity” applies to employees whether or not they are in a union.

In a recent case, the National Labor Relations Board (NLRB) ruled that employees of a sports bar who posted or “liked” Facebook posts that were critical of their boss were unlawfully fired because the posts constituted protected concerted activity. The posts were prompted when several employees discovered that they owed more in income tax than they expected. They discussed it among themselves in the workplace and then brought up the issue with the bar’s owner, who scheduled a staff meeting.

Before the scheduled meeting, an employee started a discussion on her personal Facebook page claiming the employer didn’t know how to prepare tax paperwork properly. Other employees, as well as customers of the bar, participated in the obscenity-laced discussion. The bar owner found out about the discussion and fired one of the employees who had posted in the discussion, saying she wasn’t “loyal enough.” The owner also terminated an employee who had merely “liked” one of the posts.

The NLRB said the posts were protected concerted activity because they involved four current employees and were part of a discussion that had started in the workplace as a complaint about the owners’ tax-withholding calculations. The NLRB ordered the bar to reinstate the employees.

As a common theme we ask readers who employ others to check with your attorney before you terminate an employee for social media conduct.

Three out of four employees access social media every day on personal devices while at work. Fewer than 50% have a social-media policy that applies to employees outside of work. Providing employees with social-media training is becoming increasingly important, but if you decide to embark on this journey of figuring out what “social-media training” is, be sure to first load up on a good dose of common sense!