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VOLUME 36 – NUMBER 6 May 2018 TABLE OF CONTENTS

WAGE AND HOUR DEVELOPMENTS

U.S. SUPREME COURT BLESSES CLASS ACTION WAIVERS WHILE HOLDING THAT NLRA DOES NOT PROVIDE A RIGHT TO CLASS ACTIONS ....................................................................... 1

SUPREME COURT LAYS DOWN ABC’S OF EMPLOYEE VS. INDEPENDENT CONTRACTOR STANDARDS ....................................................................................................................................... 3

WAGE-HOUR CLAIMS FAILED AGAINST OWNER OF SERVICE STATIONS OPERATED BY OTHERS .............................................................................................................................................. 6

U.S. SUPREME COURT HOLDS THAT SERVICE ADVISORS ARE EXEMPT FROM FLSA OVERTIME RULES ............................................................................................................................. 8

SUPREME COURT CLARIFIES ITS NEW OVERTIME PAY DECISION IN FLAT SUM BONUS CASE ................................................................................................................................................... 9

ABILITY TO RECOVER PAY STUB PENALTIES LIMITED IN CASE INVOLVING ALTERNATIVE WORKWEEK SCHEDULES .............................................................................................................. 10

PAGA CONSTRUED BROADLY TO ALLOW AGGRIEVED EMPLOYEE TO PURSUE ALL LABOR CODE VIOLATIONS ............................................................................................................. 11

“TEMP” EMPLOYEES WHO SETTLE CLAIMS WITH STAFFING AGENCY CANNOT ALSO SUE THE BUSINESS WHERE THEY WORKED FOR THE SAME CLAIMS .............................................. 12

U.S. SUPREME COURT SET TO REVIEW YET ANOTHER DECISION RELATING TO ARBITRATION AGREEMENTS ......................................................................................................... 13

U.S. DEPARTMENT OF LABOR OPINION REVIEWS TRAVEL TIME RULES UNDER THE FLSA .. 14

SPECIAL REST BREAKS REQUIRED FOR MEDICAL REASONS ARE NOT COMPENSABLE UNDER FLSA .................................................................................................................................... 16

EMPLOYEE’S FAILURE TO BRING CASE TO TRIAL WITHIN FIVE YEARS RESULTS IN DISMISSAL OF CASE ....................................................................................................................... 17

DOL ISSUES CLARIFICATION OF TIP CREDIT RULES BASED ON FLSA AMENDMENTS. .......... 17

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MANUFACTURING EMPLOYER OBTAINS PARTIAL VICTORY ON CLASS CERTIFICATION ....... 19

RIDE-SHARE DRIVERS WERE INDEPENDENT CONTRACTORS .................................................. 20

EMPLOYMENT DISCRIMINATION AND WRONGFUL DISCHARGE DEVELOPMENTS

EMPLOYERS CANNOT USE PRIOR SALARY ALONE TO JUSTIFY WAGE DIFFERENTIALS BETWEEN MEN AND WOMEN ......................................................................................................... 21

90-DAY PERIOD TO FILE TITLE VII CASE BEGINS WHEN RIGHT-TO-SUE NOTICE IS GIVEN .... 22

HIGHLY-COMPENSATED EXECUTIVE MUST ARBITRATE EMPLOYMENT-RELATED CLAIMS AGAINST TECHNOLOGY COMPANY .............................................................................................. 23

TERMINATION OF EMPLOYEE FOR CONDUCT TOWARDS CUSTOMER DID NOT SUPPORT HARASSMENT OR RETALIATION CLAIMS ..................................................................................... 24

MEDICAL LEAVE PERIOD MAY BE DEDUCTED FROM EMPLOYEE’S PROBATIONARY PERIOD UNDER THE FEHA ............................................................................................................. 26

EMPLOYEE WAS NOT DISABLED DUE TO INABILITY TO WORK OVERTIME .............................. 27

SEVERANCE AGREEMENT BARRED DISCRIMINATION CLAIMS OF LAID OFF EMPLOYEE ...... 28

DISCRIMINATION BECAUSE OF EMPLOYEE’S TRANSGENDER OR TRANSITIONING STATUS VIOLATES TITLE VII .......................................................................................................... 29

THWARTING PREGNANT WOMAN’S JOB APPLICATION MAY VIOLATE FEHA ........................... 29

PROBATIONARY EMPLOYEE LACKED PROPERTY INTEREST IN HIS JOB ................................. 30

NEW YORK MAYOR SIGNS ANTI-HARASSMENT ACT INTO LAW ................................................ 30

MISCELLANEOUS DEVELOPMENTS

SEATTLE’S “UBER UNIONIZATION” ORDINANCE IS AGAIN STALLED IN COURT ....................... 31

TRIBAL GAMING ESTABLISHMENTS MAY BE REGULATED BY NLRB ......................................... 32

NLRB BACK TO FIVE MEMBER COMPOSITION ............................................................................. 32

NEW PUBLICATIONS

NEW EDITION OF WAGE AND HOUR MANUAL PUBLISHED IN ELECTRONIC AND PRINT FORMATS ......................................................................................................................................... 34

NEW EDITION OF BOOK OF HUMAN RESOURCES FORMS PUBLISHED .................................... 35

16TH EDITION OF SEXUAL HARASSMENT TRAINING MANUAL NOW AVAILABLE ..................... 35

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2018 EDITION OF WRONGFUL DISCHARGE MANUAL PUBLISHED ............................................. 36

LEAVES OF ABSENCE AND TIME OFF FROM WORK MANUAL UPDATED FOR 2018 ................. 37

NEW EDITION OF CALIFORNIA’S SICK PAY OBLIGATIONS.......................................................... 38

2018 SEMINAR SCHEDULE

WAGE-HOUR, EMPLOYMENT DISCRIMINATION, WRONGFUL DISCHARGE, FAMILY LEAVE LAWS, AND EMPLOYEE HANDBOOK SEMINARS .......................................................................... 38

PUBLICATIONS NOW AVAILABLE ELECTRONICALLY............................................................................ 39

ALERT RENEWAL ....................................................................................................................................... 39

ABOUT THE ALERT..................................................................................................................................... 39

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WAGE AND HOUR DEVELOPMENTS

U.S. SUPREME COURT BLESSES CLASS ACTION WAIVERS WHILE HOLDING THAT NLRA DOES NOT PROVIDE A RIGHT TO CLASS ACTIONS

In Epic Systems Corp. v. Lewis, the U.S. Supreme Court held 5-to-4 on May 21, 2018 that class action waivers set out in arbitration agreements are alive and well despite claims that they interfere with employee rights under Section 7 of the National Labor Relations Act (“NLRA”). Putting policy considerations aside, Justice Gorsuch wrote in the blockbuster decision that the matter was clear “as a matter of law.” In the Federal Arbitration Act (“FAA”), Congress has directed federal courts “to enforce arbitration agreements according to their terms – including terms providing for individualized proceedings.” In reaching this decision, the Supreme Court opened the door, once again, to the use of properly drafted arbitration agreements that preclude employees from bringing or participating in class or collective action proceedings.

1. Overview Of The Three Court Of Appeal Decisions

The three cases reviewed by the Supreme Court each involved contracts between an employer and employee that provided for individualized arbitration proceedings to resolve employment disputes. Despite these agreements, each employee sought to litigate Fair Labor Standards Act (“FLSA”) and related state law claims through class or collective actions in federal court. They sought to extricate themselves from the obligation to arbitrate their claims on an individual basis by contending that, by requiring individualized proceedings, the agreements violated the NLRA.

The employers disagreed. They countered that the FAA protects agreements requiring arbitration from judicial interference. Furthermore, neither the saving clause in the FAA nor the NLRA demands a different conclusion. The Supreme

Court held that Congress has instructed courts to enforce arbitration agreements providing for individualized proceedings. Neither the saving clause nor the NLRA suggests otherwise.

In declining to read a new right to bring class actions into the NLRA, the Supreme Court resolved a conflict among the Fifth, Seventh and Ninth Circuit Court of Appeals. It reversed the decisions of the Ninth Circuit in Ernst & Young LLP v. Morris and the Seventh Circuit in Epic Systems Corp. v. Lewis, while affirming the judgment of the Fifth Circuit in NLRB v. Murphy Oil USA, Inc.

The Supreme Court stated:

“The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.”

a. The FAA Saving Clause

In its analysis, the Supreme Court examined the FAA saving clause, which allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract.” This recognizes only “generally applicable contract defenses, such as fraud, duress or unconscionability. It does not permit defenses targeting arbitration either by name or by more subtle methods, such as by interfering with “fundamental attributes of arbitration.” The court determined that by challenging the agreements because they require individualized arbitration instead of class or collective proceedings, “the employees seek to interfere with one of these fundamental attributes.”

b. The NLRA Does Not Bar Class Action Waivers

Likewise, the Supreme Court rejected the employees’ NLRA claims. They asked the court to infer that class and collective actions are “concerted activities” protected by Section 7 of the NLRA, which guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively …, and to engage in other concerted activities for the purpose of collective bargaining or other mutual

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aid or protection.” Finding that Section 7 focuses on the right to organize unions and bargain collectively, the court observed that it does not mention class or collective action procedures or even hint at a clear and manifest wish to displace the FAA.

Here, the Supreme Court found it possible to give effect to both federal laws in issue, the FAA and the NLRA. It concluded that the NLRA does not prevent the use of class action waivers that restrict employees to arbitrating disputes in their individual capacity rather than in a class or collective proceeding.

2. The Ninth Circuit’s Decision In Morris

The Court gave close attention to the Ninth Circuit decision in Ernst & Young LLP v. Morris, 834 F.3d 975 (2016), where a junior accountant, Stephen Morris, entered into an agreement providing that the employer and Morris would arbitrate any disputes that might arise between them. The agreement specified individualized arbitration, with claims “pertaining to different employees to be heard in separate proceedings.” After his employment ended, and despite having agreed to arbitrate claims against the firm, Morris sued Ernst & Young in federal court. He alleged that the firm had misclassified its junior accountants as professional employees and violated the FLSA and California law by paying them salaries without overtime pay. Although the arbitration agreement provided for individualized proceedings, Morris sought to litigate the federal claims on behalf of a nationwide class under the FLSA’s collective action provision, 29 U.S.C. § 216(b). He also sought to pursue the state law claim as a class action under Federal Rule of Civil Procedure 23.

Ernst & Young replied with a motion to compel arbitration. The district court granted the request, but the Ninth Circuit reversed this judgment. The Ninth Circuit recognized that the FAA generally requires courts to enforce arbitration agreements as written, but reasoned that the statute’s “saving clause,” 9 U.S.C. § 2, removes this obligation, if an arbitration agreement violates some other federal law. It then concluded that an agreement requiring individualized

arbitration proceedings violates the NLRA (29 U.S.C. § 157) by barring employees from engaging in the “concerted activity” of pursuing claims as a class or collective action.

3. The Supreme Court Disagreed With The Ninth Circuit

In expressing disagreement with the Ninth Circuit, the Supreme Court determined that the saving clause in the FAA did not support the claim that the agreement for individualized arbitration violated the NLRA. In the course of announcing its conclusion the Supreme Court issued several important reminders to lower courts regarding the value of arbitration, which it viewed as a means of resolving employment disputes in a convenient, efficient and fair way. For example, the Supreme Court reiterated:

(a) The NLRA does not guarantee class or collective action procedures in disputes before judges or arbitrators.

(b) Arbitrations offer “the promise of quicker, more informal, and often cheaper resolutions for everyone involved.”

(c) Congress directed courts to abandon their hostility and instead treat arbitration agreements as “valid, irrevocable, and enforceable.”

(d) There is an unmistakably “clear congressional purpose that the arbitration procedure, when selected by the parties to a contract, be speedy and not subject to delay and obstruction in the courts.”

(e) Congress directed the courts “to respect and enforce the parties’ chosen arbitration procedures,” e.g., § 3 provides for a stay of litigation pending arbitration “in accordance with the terms of the agreement.”

(f) The FAA’s “saving clause recognizes only defenses that apply to “any” contract and establishes a sort of “equal-treatment” rule for arbitration contracts, permitting agreements to arbitrate to be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability, but offering no

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refuge for “defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” It does not save defenses that target arbitration either by name or by more subtle methods, such as by interfering with “fundamental attributes” of arbitration. The Supreme Court noted that the employees’ argument stumbled because they did not suggest their arbitration agreements were extracted by an act of fraud or duress or in some unconscionable way that would render any contract unenforceable. Instead, they objected to their agreements precisely because they require individualized arbitration proceedings instead of class or collective ones. And by attacking (only) the individualized nature of the arbitration proceedings, the employees’ argument seeks to interfere with one of arbitration’s fundamental attributes.

(g) Allowing any party in arbitration to demand class-wide proceedings despite the traditionally individualized and informal nature of arbitration would sacrifice the principal advantage of arbitration – it’s informality – and make the process slower, more costly, and more likely to generate procedural morass than fiscal judgment. Based on the Supreme Court’s earlier decisions and Epic Systems, courts may not allow a contract defense to reshape traditional individualized arbitration by mandating class-wide arbitration procedures without the parties’ consent.

4. Does Arbitration Make Sense?

In evaluating the Epic Systems decision, it is important that employers consider the pros and cons of arbitration agreements generally and then separately analyze the issues associated with class action waivers. For example, some of the potential cons often associated with arbitration agreements include the inability to appeal unfavorable decisions, the need for the employer to incur the costs of the arbitrator, the inability to effectively prevent PAGA claims from being pursued despite a class and collective action waiver, and the strategy of some plaintiff lawyers to seek to leverage the costs of multiple arbitrations against the employer. And, while it can be argued that arbitration is faster and less expensive than litigation in court, that is not always true.

It appears that the interest in utilizing arbitration agreements will increase as a result of the clear path created by Epic Systems. Yet, if history suggests anything, it can be predicted that while the proponents of arbitration will tout the advantages of the arbitration forum, opponents of arbitration will decry that it undercuts the right to a jury trial. These opponents will continue to mount attacks against arbitration agreements in court and in the legislatures. Each side has its own messaging, but it is now clear that the U.S. Supreme Court and many other courts have recognized that arbitration can benefit employees and employers by providing a fair, efficient, relatively quick and less expensive means of resolving many workplace disputes.

SUPREME COURT LAYS DOWN ABC’S OF EMPLOYEE VS. INDEPENDENT CONTRACTOR STANDARDS

On April 30, 2018, the California Supreme Court issued a landmark decision in Dynamex Operations West, Inc. v. Superior Court, _____ Cal.5th _____ (2018), where it described a seismic shift in the standards used to examine independent contractor relationships, under the Wage Orders. Stating that a “hiring entity” will bear the burden of proof in “misclassification” cases, the Supreme Court announced a judicial crackdown against businesses that misclassify employees as independent contractors in order to derive an unfair competitive advantage over other businesses that comply with the law. As the discussion below shows, Dynamex is a game changer.

1. Fundamental Differences Exist In The Obligations Owed To Employees vs. Independent Contractors

The Court began its 82-page decision by identifying numerous responsibilities that employers have for employees that do not apply to independent contractors. It proceeded to make it clear that the responsibilities cannot be sidestepped by misclassifying employees as independent contractors. It then identified the standard that applies in deciding whether workers should be classified as employees or independent

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contractors for purposes of the California Wage Orders that impose obligations relating to minimum wages, maximum hours, overtime pay, meal and rest periods and other matters. The Supreme Court announced that, based on the Wage Orders’ “suffer or permit to work” standard, “hiring entities” must satisfy a three-part test, the “ABC test,” to establish that an individual qualifies as an independent contractor. This test applies to claims that derive directly from the obligations imposed by the Wage Orders. It does not necessarily follow that the same test will apply under different statutes, such as the reimbursement rules for business expenses that are obtainable only under Labor Code Section 2802. Employers should therefore recognize that the new test will not govern misclassification questions in every context.

2. Overview Of Case

The case arose when two delivery drivers filed a class action against Dynamex, a nationwide package and document delivery company. They alleged that Dynamex, referred to as a “hiring entity,” had misclassified drivers as independent contractors rather than employees. As a result of the alleged misclassification, the drivers asserted claims under Wage Order 9, which governs the transportation industry, as well as various sections of the Labor Code. They also claimed that Dynamex engaged in unfair and unlawful business practices under California Business and Professions Code Section 17200.

a. The “Suffer Or Permit To Work” Rule

The Supreme Court explained that the “suffer or permit to work” definition of “employ” contained in the Wage Order may be relied upon in evaluating whether a worker is an employee or an independent contractor for purposes of the obligations imposed by the Wage Order. It concluded that the suffer or permit to work definition must be interpreted broadly in order to provide the Wage Order’s protections to all workers who would “ordinarily be viewed as working in the hiring business.” Yet, it also cautioned there are limits on the scope of the suffer or permit to work definition, which the Supreme Court described as a “term of art.” For

example, it cannot be interpreted literally in a manner that would encompass within the “employee category” the type of workers, like independent plumbers or electricians, who have traditionally been viewed as genuine independent contractors working in their own independent business. The Supreme Court thus injected a new question into the analysis – what is a “genuine” independent contractor?

b. The Role Of The “ABC” Test

Under the suffer-or-permit-to-work framework, the Supreme Court concluded that in determining whether a worker is properly considered an independent contractor to whom the Wage Order does not apply, it is appropriate to look to a standard, commonly referred to as the “ABC” test that is utilized in other jurisdictions. Under this test, a worker is properly considered an independent contractor to whom a Wage Order does not apply only if the hiring entity establishes each of three elements:

(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work (both under the contract for the performance of such work and in fact);

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

3. The History Of Relevant California Decisions

The Supreme Court embarked upon a 40-page analysis of cases that proffered an historical review of the distinctions between employees and independent contractors under California law. The discussion began with a 1944 United States Supreme Court decision and reviewed later developments through the present. In the course of this historical analysis, the Supreme Court devoted particular attention to three California

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Supreme Court decisions that had each been heralded as “seminal” in their own right. These three pillars of California’s employee vs. independent contractor jurisprudence constructed between 1989 and 2014 included the decisions in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989) (“Borello”), Martinez v. Combs, 49 Cal.4th 35 (2010) (“Martinez”), and Ayala v. Antelope Valley Newspapers, Inc., 59 Cal.4th 522 (2014) (“Ayala”). Martinez, for example, identified the following three alternative definitions “to employ.” It means (a) to exercise control over the wages, hours, or working conditions, or (b) to suffer or permit to work, or (c) to engage.

a. The Burden Of Proof

After analyzing these cases, the Supreme Court firmly placed the burden of proof on the “hiring entity” in the wage and hour context, noting concerns inherent in relying upon a multifactor, “all the circumstances” standard for distinguishing between employees and independent contractors. Instead, based on the history and purpose of the “suffer or permit to work standard” in California’s Wage Orders, the Supreme Court decided to (1) place the burden on the hiring entity to establish that the worker is an independent contractor who was not intended to be included within the Wage Order’s coverage, and (2) require the hiring entity, in order to meet this burden, to establish each of the three factors embodied in the ABC test – “namely (A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.”

b. Analysis Of The Three Elements

(1) Part A – Focus on Control

After listing the three factors embodied in the ABC test, the Supreme Court elaborated on each of the factors. For example, under Part A,

the decision explained that a worker who is subject, either as a matter of contractual right or in actual practice, to the type and degree of control a business typically exercises over employees would be considered an employee under the common law test as well as the “suffer or permit to work” standard. Further, as noted in Borello, depending on the nature of the work and overall arrangement between the parties, a business need not control the precise manner or details of the work in order to be found to have maintained the necessary control that an employer ordinarily possesses over its employees, but does not possess over a genuine independent contractor. The hiring entity must establish that the worker is free of such control to satisfy Part A of the test.

(2) Part B – Work Performed Outside Of The Usual Course Of Business

Under Part B, a separate question is examined independent of the question of control in Part A. This test inquires whether the worker performs work that is outside the usual course of the hiring entity’s business. Workers whose roles are most clearly comparable to those of employees include individuals whose services are provided within the usual course of the business of the entity for which the work is performed and thus who would ordinarily be viewed by others as working in the hiring entity’s business rather than working in the worker’s own independent business. For example, when a retail store hires an outside plumber or electrician to repair a leak or install an electrical line, the services are not part of the store’s usual course of business. Thus, the store would not reasonably be seen as having suffered or permitted the plumber or electrician to provide services as an employee.

The decision explained that a focus on the nature of the worker’s role within a hiring entity’s usual business operation aligns with the additional purpose of the Wage Orders to protect companies that in good faith comply with a Wage Order’s obligations against those competitors in the same industry or line of business that resort to cost saving worker classifications that fail to provide the required minimum protections to similarly situated workers. Accordingly, a hiring entity must establish that the worker performs work that is

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outside the usual course of its business in order to satisfy Part B of the ABC test.

(3) Part C – Engaged In An Independent Trade, Occupation, Or Business

Part C of the test asks whether the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed by the hiring entity. The decision observed that the term “independent contractor,” when applied to an individual worker, ordinarily has been understood to refer to an individual who independently has made the decision to go into business for himself or herself. Such an individual generally takes the usual steps to establish and promote his or her independent business – “for example, through incorporation, licensure, advertisements, routine offerings to provide the services of the independent business to the public or to a number of potential customers, and the like.

When a worker has not independently decided to engage in an independently established business but instead is simply designated an independent contractor by the unilateral action of a hiring entity, there is a substantial risk that the hiring business is attempting to evade the demands of an applicable wage order through misclassification. A company that labels as independent contractors a class of workers who are not engaged in an independently established business in order to enable the company to obtain the economic advantages that flow from avoiding the financial obligations that a Wage Order imposes on employers unquestionably violates the fundamental purposes of the Wage Order. The fact that a company has not prohibited or prevented a worker from engaging in such a business is not sufficient to establish that the worker has independently made the decision to go into business for himself or herself.”

Accordingly, in order to satisfy Part C of the ABC test, the hiring entity must prove that the worker is customarily engaged in an independently established trade, occupation, or business.

4. Summary Of The ABC Standard

The Supreme Court emphasized that the hiring entity must establish the existence of each of the three parts of the ABC standard in order to establish that a worker is an independent contractor. Thus, unless the hiring entity establishes that (A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance for the work and in fact, (B) the worker performs work that is outside the usual course of the hiring entity’s business, and (C) the worker is customarily engaged in an independently established trade, occupation, or business, the worker should be considered an employee and the hiring business an employer under the suffer or permit to work standard in the Wage Orders. The hiring entity’s failure to prove any one of these three prerequisites will be sufficient in itself to establish that the worker is covered by the Wage Order as an employee.

Notably, the Supreme Court cautioned that the interpretation of the suffer or permit to work standard should not yield inappropriate results. For example, it recognized that the Wage Orders are not intended to apply to the type of “traditional independent contractor – like an independent plumber or electrician –” who has never been reasonably viewed as an employee of a hiring business. Consequently, the Wage Orders should not be interpreted to apply to such persons.

WAGE-HOUR CLAIMS FAILED AGAINST OWNER OF SERVICE STATIONS OPERATED BY OTHERS

The California Supreme Court’s recent decision in Dynamex Operations West v. Superior Court identifies the significance of determining whether a worker is an employee or an independent contractor under California law. The Supreme Court examined its prior decisions in the area before adopting the “ABC test” discussed in the earlier article regarding the case. One of those decisions was its 2010 decision in Martinez v. Combs, 49 Cal.4th 35 (2010). In Martinez the Supreme Court explained who may be liable under the Wage Orders and determined

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that there are three alternative definitions of “to employ.” It means: (a) to exercise control over the wages, hours, or working conditions, or (b) to suffer or permit to work, or (c) to engage.

On April 26, 2018, just four days before Dynamex was decided, a California Court of Appeal examined the Martinez standards in Curry v. Equilon Enterprises, LLC, ____ Cal.App.5th ____ (2018). The plaintiff in the case, Sadie M. Curry, brought a class action against Equilon Enterprises, LLC, which did business as Shell Oil Products US. She asserted claims for (1) failure to pay overtime, (2) failure to pay for missed breaks, and (3) unfair business practices. The trial court found Shell was not Curry’s employer and granted Shell’s motion for summary judgment. The court of appeal affirmed the judgment.

This case does not wrestle with the issue presented in Dynamex, namely, when is a worker an independent contractor or employee of a “hiring entity.” Instead, it addressed the question of whether an employee of one company is also an employee or joint employee of a separate company. Unlike Dynamex, there was no independent contractor issue or analysis in Curry. In fact, the court modified its decision on May 18, 2018, explaining that “it does not appear that the Supreme Court intended for the ABC test to be applied in joint employment cases.”

1. Background

Prior to May 2003, Shell owned approximately 365 service stations in California. It operated some of the stations itself, with its own employees. It later changed its business model so it no longer operated its own service stations with its own employees. Instead, it offered leases and operating agreements to entities that sought to run Shell’s service stations. The leases provided that the operators/lessees (“Operator”) had a lease interest in the service stations, convenience stores and car wash facilities, and retained all the profits. Shell received all the revenue from the fuel sales and set the fuel prices.

The operators had the right to select, hire, and discharge employees and were required to “remove” employees promptly upon Shell’s request “for good cause shown.” Significantly, Shell did

not have the right to select, hire, discharge, supervise or instruct any of the operators’ employees.

ARS was a limited liability company that had a contract and leases with Shell to operate 15 gas stations throughout San Diego County and employed over 100 people at those stations. In 2003, Curry was recruited by an ARS employee to manage the Via Rancho station in exchange for a $32,000 annual salary. She completed an ARS employment application and then signed ARS’ offer of employment. ARS, in turn, assigned her job duties and she reported to, was trained by, and supervised ARS employees.

There was no dispute that Curry was employed by ARS. She brought an action alleging overtime and meal period claims against Shell, asserting that she was misclassified as an exempt employee. She alleged Shell was her joint employer, along with ARS. She alleged that Shell controlled her wages, hours or working conditions, both directly and indirectly.

2. Shell’s Motion For Summary Judgment

Shell moved for summary judgment, asserting that it did not employ Curry and therefore her case against it failed. Shell contended it had a business relationship with ARS, but ARS alone “managed and controlled every aspect of its employment relationship with its gas station employees such as Curry.” For example, ARS made all recruiting, interviewing, hiring, disciplinary, promotional and termination decisions with respect to its own employees. ARS also implemented its own personnel policies and procedures, and determined exclusively the terms and conditions of its employees employment, including how much to pay them and what benefits, if any, to provide them. ARS also determined what duties should be performed by its employees, and maintained exclusive control over all payroll, human resources and recordkeeping functions. ARS also controlled the manner and means by which work was performed at the stations and the day-to-day operations of its stations.

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The trial court agreed that Shell was not Curry’s employer, either solely or jointly, and therefore her claims failed. It thus granted Shell’s motion for summary judgment.

3. The Martinez Analysis

The court of appeal relied on the Supreme Court’s decision in Martinez v. Combs to determine whether Curry was an employee of Shell. It referred to the three alternative definitions of “to employ” recited in Martinez, including (a) to exercise control over the wages, hours, or working conditions, (b) to suffer or permit to work, or (c) to engage. It separately examined each of the three alternative definitions and concluded that (a) Shell did not exercise control over Curry’s wages, hours, or working conditions, (b) Shell did not suffer or permit Curry to work, and (c) she did not meet the “to engage” standard under the common law employment test. It explained that the essence of the common law test “is the control of details,” i.e., whether the principal has the right to control the manner and means by which the worker accomplishes the work. In addition, the court explained that there are a number of additional factors in the equation, including (1) whether the worker is engaged in a distinct occupation or business, (2) whether, considering the kind of occupation and locality, the work is usually done under the principal’s direction or by a specialist without supervision, (3) the skill required, (4) whether the principal or worker supplies the instrumentalities, tools, and place of work, (5) the length of time for which the services are to be performed, (6) the method of payment, whether by time or by job, (7) whether the work is part of the principal’s regular business, and (8) whether the parties believe they are creating an employer-employee relationship.

4. Conclusion

After examining each of the relevant factors, the court of appeal found that Shell, along with ARS, provided Curry a place to work and the equipment with which she performed her job. However, providing a portion of Curry’s work location and equipment was insufficient to raise a triable issue of material fact as to Shell being Curry’s employer due to the many other factors reflecting Shell is not Curry’s employer. It

determined that one “could not reasonably conclude that Shell controlled the manner and means by which Curry accomplished her work because Shell did not supervise Curry, Shell did not have input on Curry’s skills, Shell did not have control over the length of time Curry performed her job, Shell did not pay Curry, Shell was not in the business of operating service stations, and Shell and Curry did not believe they were creating an employer-employee relationship. It thus concluded that Curry’s claims failed under the “to engage” definition of employer. In summary, Curry’s claims failed because there was no issue concerning Shell being Curry’s employer under any of the three legal definitions of employer recognized in Martinez. The trial court therefore was correct in granting Shell summary judgment.

U.S. SUPREME COURT HOLDS THAT SERVICE ADVISORS ARE EXEMPT FROM FLSA OVERTIME RULES

The Fair Labor Standards Act (“FLSA”) requires employers to pay overtime compensation to non-exempt employees. It contains an exemption for “any salesman, or mechanic primarily engaged in selling or servicing automobiles” at a dealership. On April 2, 2018, the U.S. Supreme Court decided Encino Motor Cars, LLC v. Navarro, 584 U.S. ____ (2018). It considered whether the exemption applies to service advisors – employees at car dealerships who consult with customers about their servicing needs and sell them servicing solutions.

The Supreme Court disagreed with the Ninth Circuit Court of Appeals and concluded that service advisors are exempt from the federal overtime requirements. Significantly, in reversing the Ninth Circuit, the Supreme Court rejected the principle that exemptions to the FLSA should be construed narrowly. Rather, because the FLSA gives no textual indication that an exemption should be construed narrowly, the Supreme Court determined that they should be given a fair reading.

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In addressing the role of exemptions in the FLSA, the Supreme Court stated:

“Because the FLSA gives no “textual indication” that its exemptions should be construed narrowly, “there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.” Scalia, Reading Law, at 363. The narrow-construction principle relies on the flawed premise that the FLSA “‘pursues’” its remedial purpose “‘at all costs.” [citations omitted.] ([I]t is quite mistaken to assume . . . that whatever might appear to further the statute’s primary objective must be the law” (internal quotation marks and alterations omitted)), including the one at issue. Those exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement. . . . We thus have no license to give the exemption anything but a fair reading.”

The Supreme Court’s decision is obviously quite significant and will have a significant effect in states that have similar exemptions or simply defer to the FLSA standards. It can be expected to have less significance in California because the state law does not exempt service advisors from its overtime standards. On a side note, some Supreme Court scholars speculate that the five-to-four decision may signal a division among the nine justices that will resurface in other employment cases.

SUPREME COURT CLARIFIES ITS NEW OVERTIME PAY DECISION IN FLAT SUM BONUS CASE

On March 5, 2018, the California Supreme Court addressed the method of calculating overtime pay where employees earn “flat sum bonuses” in its decision in Alvarado v. Dart Container Corp. of California, 4 Cal. 5th 542 (2018). The Supreme Court described how a non-exempt employee’s overtime pay rate should be

calculated when the employee has earned a “flat sum bonus” during a single pay period. The decision is described in detail at pages 1-4 of the March 2018 issue of the ALERT.

1. The Supreme Court Modified Its Decision

On April 25, 2018, the Supreme Court clarified its March 5th opinion in Alvarado. Specifically, it added a footnote at the end of the sentence that reads: “Plaintiff’s formula turns out to be marginally more favorable to employees; the key distinction between the two formulas [advocated by the plaintiff and the employer] is whether the bonus is allocated to all hours worked, or only to the non-overtime hours worked.”

The new footnote reads:

“Defendant’s formula and plaintiff’s formula have one thing in common: both use the pay period as the basis for calculating an employee’s regular rate of pay. In other words, neither party suggests that regular rate of pay should be calculated on a workweek basis, which might result in an employee having two or more regular rates of pay in a single pay period. This opinion follows the lead of the parties in using the pay period as the basis for calculating regular rate of pay, but we did not grant review to decide whether, under California law, regular rate of pay is properly calculated on a pay-period basis or a workweek basis, and nothing in this opinion should be interpreted as deciding that question.”

2. The Effect Of The Clarification

Generally, an employee’s “regular rate of pay” and overtime are calculated on a workweek basis under state and federal law. The flat sum bonuses at issue in Alvarado involved an “attendance bonus” paid if employees were scheduled to work on a Saturday or Sunday and completed the full work shift. The bonus consisted of a flat sum of $15.00 per day of weekend work,

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regardless of whether employees exceeded the normal work shift on the day in question.

Both the employer and employee described a methodology for calculating overtime with respect to hourly wages and the bonus in relation to “pay periods.” The Supreme Court explained that it simply “followed the lead of the parties in using the pay period as the basis for calculating regular rate of pay,” but did not actually decide whether the regular rate of pay should be calculated on a pay period or workweek basis.

When the confusion caused by the reference in the decision to pay periods was brought to the Supreme Court’s attention, it was alerted to the fact that some attorneys were already using the language in the decision to advocate a further shift in California’s overtime calculation standards to a pay period basis rather than the workweek basis historically used in most situations. The Supreme Court recognized the need to clarify the point. Thus, even though the workweek basis has historically been used by the California Division of Labor Standards Enforcement (“DLSE”) and the courts, the issue may resurface in a later decision.

3. Upcoming Seminars

The Alvarado decision will be discussed in detail at the upcoming wage and hour programs sponsored by Castle Publications, Ltd. The dates and locations of the programs are described later in this issue. Other new decisions, including the Supreme Court’s April 30, 2018 decision on independent contractors in Dynamex, will also be examined.

ABILITY TO RECOVER PAY STUB PENALTIES LIMITED IN CASE INVOLVING ALTERNATIVE WORKWEEK SCHEDULES

Plaintiff’s attorneys often argue that California’s pay stub statute, Labor Code Section 226, provides a basis for employees to obtain penalties whenever an employer is found not to have paid the employees all wages that are owed. For example, if an employer pays overtime at an incorrect rate or fails to pay amounts for unrecorded work time, attorneys frequently claim

that, in addition to the amount that the employer should have paid for the overtime or time worked, the employer also owes Section 226 penalties -- even where the pay stub accurately reflects the amounts and pay rates actually paid to the employees. This theory seeks to obtain a double recovery -- once for the wage violation and then again for the claimed pay stub “error.”

In Maldonado v. Epsilon Plastics, Inc., ___ Cal.App.5th ___ (2018), the California Court of Appeal rejected this interpretation of Labor Code Section 226 in a case where the employer was unable to show that it paid overtime properly based on an alternative workweek schedule (“AWS”). While the court found that Section 226 may yield wage statement penalties when an employer omits required information or inaccurately reports an employee’s work hours on a pay stub, no such penalties are recoverable when a pay stub accurately reflects the employee’s hours worked and the rates the employer actually paid.

1. Background

An employer operated a plastic bag manufacturing facility that was designed to run 24-hours a day. Employees worked 12-hour shifts -- four shifts in one week, and three shifts the following week. The employer maintained an AWS under which the employees were paid regular time for the first 10 hours of the 12-hour shifts, and overtime for the last two hours (10/2 AWS). The AWS was apparently implemented under a prior owner’s oversight, and there was limited evidence about the way it was implemented. In 2011, employees brought a potential class action of hourly employees for violations of various wage-hour laws, including overtime and pay stub claims under Section 226.

2. Trial Court’s Decision

The case proceeded to trial. After hearing testimony from witnesses regarding the adoption of the AWS, the trial court issued a decision in favor of the employees. It found that there was no validly-implemented AWS and that the employer “failed to inform the employees that by agreeing to the [10/2 AWS], they were waiving overtime pay for hours nine and ten of the 12-hour shift that they

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would otherwise be entitled to.” The trial court entered judgment for the employees for $935,297.40.

3. The Court Of Appeal Affirmed The AWS Ruling, But Agreed With The Employer On The Pay Stub Claim

The Court of Appeal determined that the employer had the burden to establish that the AWS was properly implemented, and that the trial court did not err in its finding there was insufficient evidence that the 10/2 AWS was properly adopted.

In regard to the pay stub claim, the employees argued that the corresponding number of hours worked at each hourly rate was not accurate because, in hindsight, the employees were entitled to eight hours at their base rate and four hours at their overtime rate (for each 12-hour shift), but the pay stub indicated they worked 10 hours at their base rate and two hours at their overtime rate. The employer used commonsense to argue that the pay stubs were accurate because they correctly reflected the hours worked and the pay received. Indeed, it argued that if the employees’ argument were followed to its logical conclusion, the only way the employer could have avoided wage statement penalties while operating under the 10/2 AWS it believed was legitimate would have been to issue a wage statement which bore no similarity to the pay the employees were actually receiving. The court agreed with the employer, noting that it was illogical under the facts to think the legislature intended to create a double recovery – once for overtime pay and then again for pay stub penalties where the pay stubs were accurate.

Finally, the court noted in a footnote that while this was an issue of first impression, the California Supreme Court may weigh in because it previously agreed to decide a question certified by the Ninth Circuit in Stewart v. San Luis Ambulance whether “meal period violations may form the basis for improper wage statement claims under section 226.”

4. Conclusion

The ALERT will continue to apprise readers of developments in this area. Meanwhile, employers defending wage-hour claims should be familiar with the Maldonado decision, especially in cases where the pay stub accurately reflects what the employer actually paid employees.

PAGA CONSTRUED BROADLY TO ALLOW AGGRIEVED EMPLOYEE TO PURSUE ALL LABOR CODE VIOLATIONS

On May 23, 2018, a California Court of Appeal issued a decision under the Private Attorneys General Act of 2004 (“PAGA”), nicknamed the “Sue Your Boss Law,” that may turn some heads. In Huff v. Securitas Security Services USA, Inc., _____ Cal.App.5th _____ (2018), the court addressed the question of whether a plaintiff who brings a representative action under PAGA may seek penalties not only for the Labor Code violation that affected him or her, but also for different violations that affected other employees. The trial court determined that Huff’s failure to prove he was personally affected by one of the multiple Labor Code violations alleged in his complaint did not preclude his action under PAGA. The court of appeal affirmed, concluding that PAGA allows an “aggrieved employee” -- a person affected by at least one Labor Code violation committed by an employer -- to pursue penalties for all the Labor Code violations committed by that employer.

1. Background

Huff worked as a security guard for Securitas for about a year. He filed a lawsuit containing a representative cause of action under PAGA, seeking penalties for alleged Labor Code violations committed against Huff and others. The Labor Code provisions allegedly violated included Sections 201, 201.3, 202, and 204 relating to the payment of wages during and at the end of employment. The trial court ultimately determined that an “aggrieved employee” can pursue penalties for Labor Code violations on behalf of other current and former employees under PAGA. For this purpose, an “aggrieved employee” is defined as someone who suffered “one or more of the alleged

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violations” of the Labor Code for which penalties are sought. Thus, so long as Huff could prove he was affected by at least one Labor Code violation, he could pursue penalties on behalf of other employees for additional violations.

2. The Court Of Appeal Construed PAGA Broadly

In affirming the trial court’s decision, the court of appeal devoted considerable attention to various arguments raised by the employer, including concerns regarding the amount of penalties PAGA authorizes. The court placed considerable weight on the language in the Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014), indicating that PAGA created a type of qui tam action, authorizing a private party to bring an action to recover a penalty on behalf of the government and receive part of the recovery as compensation. When an employee brings a representative action under PAGA, he or she does so “as the proxy or agent of the state’s labor law enforcement agencies, not other employees.” Following this reasoning, the court explained that a representative action under PAGA is not a class action. Rather, it is a law enforcement action where the plaintiff acts on behalf of the state, not on behalf of other employees.

In response to the concern expressed by the employer regarding the potential amount of penalties available under PAGA, the court noted that “PAGA gives a court broad discretion to award a lesser amount than the maximum civil penalty amount” if, based on the facts and circumstances of the particular case, “to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.” The statute therefore incorporates a remedy if the penalty calculation is unfair or arbitrary as applied to a particular employer.

The court then addressed the employer’s contention that penalties collectable by PAGA plaintiffs will be “bounded solely by their pleading imagination.” In response, the court explained that a PAGA plaintiff does not collect penalties merely by alleging a Labor Code violation in the complaint. The plaintiff still must prove at trial that a violation in fact occurred. Procedural

mechanisms such as summary adjudication remain available to weed out meritless claims before trial. However, the court did express concern that some plaintiffs may bring PAGA claims solely as a fishing expedition to attempt to uncover other violations committed by the employer. The court did not provide assurance this would not occur, but suggested that trial courts are equipped to manage cases in a way that avoids unreasonable consumption of time or resources.

3. Observations

The court of appeal sought to diligently examine the various policy arguments raised by the employer and the concerns raised by a decision that permits an “aggrieved employee” to pursue penalties for Labor Code violations that did not even affect that employee. There is little doubt that the holding could result in fishing expeditions by plaintiff’s attorneys and efforts to increase litigation costs in order to seek higher settlements. Apart from the court’s reiteration of statutory principles, such as the fact that courts have discretion to lower penalties awarded under PAGA and plaintiffs must actually prove Labor Code violations to recover, the decision is an eye opener for employers. It must be given serious attention when defending claims under PAGA.

“TEMP” EMPLOYEES WHO SETTLE CLAIMS WITH STAFFING AGENCY CANNOT ALSO SUE THE BUSINESS WHERE THEY WORKED FOR THE SAME CLAIMS

Significant numbers of individuals find work as “temp” employees through a staffing agency. Under many circumstances, these individuals are considered to be the employee of both the staffing agency as well the business where they are assigned for a temporary placement. In Castillo v. Glenair, Inc., ___ Cal.App. 5th ___ (April 16, 2018), a California Court of Appeal recently concluded that employees who previously settled wage and hour claims with a staffing agency could not turn around and sue the “assigned business” for the same claims.

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1. Background

A proposed class action lawsuit was filed against a staffing agency for commonly-asserted wage and hour claims, including improper wage statements (i.e., pay stubs), an alleged failure to pay for all wages, and the denial of meal and rest periods. Ultimately, the staffing agency settled the case on a class basis for all employees who worked in California during the relevant time period. The settlement agreement released the alleged wage and hour claims against the staffing agency, as well as all of its “agents.”

While the first case against the staffing agency was proceeding towards settlement, two individuals sued the business where they had been assigned by the staffing agency to work (i.e., Glenair, Inc.) in a second proposed class action lawsuit. The second lawsuit raised all of the same claims as the first.

It was undisputed that the two plaintiffs in the second lawsuit (i.e., the Castillos) had only ever worked for the assigned business as temporary employees through the staffing agency. It was also undisputed that they did not exclude themselves from the class settlement in the first lawsuit. Indeed, the employees even accepted settlement payments under the agreement. Under these facts, the business moved to have the lawsuit against it dismissed.

2. The Court Dismissed The Lawsuit

In its request for dismissal, the business argued that the two plaintiffs had released their claims against it pursuant to the settlement agreement reached in the first lawsuit. The business recognized it had not been specifically identified in the settlement agreement. It also acknowledged it had never signed the prior agreement. However, the business noted that the agreement released wage and hour claims against the staffing agency and all of its agents. The business argued that it acted as the staffing company’s agent because it gathered time cards for the temporary workers, reviewed them for accuracy, and provided meal periods. It performed these tasks for the staffing agency so that it, in

turn, could issue wages to the temporary employees.

The court accepted the business’s arguments. Although the business was not a “general agent” authorized to represent the staffing agency in all matters, the court agreed that the business acted as an agent in all the ways that mattered in light of the wage and hour claims at issue. Thus, the business properly fell within the scope of the prior class action settlement. The court also supported its ruling on public policy grounds. Since the plaintiffs had already settled and been paid for releasing the identical wage and hour claims as part of the class action settlement in the first lawsuit, allowing them to sue again for the same claims would “waste judicial resources” and permit a “double recovery on their already settled claims.” Accordingly, the second case was properly dismissed.

3. Lessons Learned

Many businesses obtain temporary workers through staffing agencies. If a current or former “temp” employee sues a business, the Castillo case demonstrates why the temporary staffing agency should be contacted to determine if any relevant settlement agreements exist or are being negotiated. Any such agreement may eliminate or reduce liability.

U.S. SUPREME COURT SET TO REVIEW YET ANOTHER DECISION RELATING TO ARBITRATION AGREEMENTS

As reported earlier in this edition of the ALERT, in Epic Systems Corp. v. Lewis, the U.S. Supreme Court reversed a holding that had sought to limit the enforceability of arbitration agreements in the context of class action litigation. In Varela v. Lamps Plus, Inc., Case No. 16-56085 (9th Cir. Aug. 3, 2017), the nation’s high court is again set to review a matter that relates to the intersection of arbitration and class action cases.

In Varela, the plaintiff was an employee whose personal information was accidentally released by the employer as part of a “phishing” scam. After the employee filed a proposed class action lawsuit on behalf of himself and other

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employees, the employer sought to move the case to arbitration on an individual basis. The company relied on an arbitration agreement the employee had signed which obligated him to resolve “any” claim he might have in arbitration, as opposed to court. The employer recognized that the parties’ agreement was silent as to whether the employee could pursue claims on a class basis for other individuals. Yet, under a prior Supreme Court case called Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010), the employer argued it could not be forced to arbitrate class claims unless it had specifically agreed to do so. Because the agreement was silent concerning class arbitration, the employer argued that no agreement to arbitrate on a class basis existed.

The Ninth Circuit disagreed and sided with the employee. Even though the agreement contained no explicit language allowing for class arbitration, it held that because the employee was obligated to arbitrate “any” claim, this language necessarily represented an implicit agreement to arbitrate on a class basis. Notably, one member of the three-judge panel that decided the matter dissented because, as he saw it, the agreement “was not ambiguous” and “[w]e should not allow Varela to enlist us in this palpable evasion of Stolt-Nielsen.”

The U.S. Supreme Court agreed to review Varela on April 30, 2018. Although we will not know until the Supreme Court rules, many believe the high court will reverse the Ninth Circuit’s decision in light of its recent holding in Epic Systems.

U.S. DEPARTMENT OF LABOR OPINION REVIEWS TRAVEL TIME RULES UNDER THE FLSA

On April 12, 2018, the U.S. Department of Labor (“DOL”) issued Opinion Letter FLSA 2018-18 concerning the compensability of travel time for hourly technicians under the Fair Labor Standards Act (“FLSA”). It determined that the FLSA requires compensation for much, but not all, of the technician’s travel time in question. The questions addressed and answered are described below.

1. Background Facts

The company seeking the opinion repairs, inspects, and tests cranes. Its hourly technicians do not work at a fixed location, but rather work at varying customer locations servicing cranes. The technicians have no fixed daily schedule and often work between 8 and 12 hours. They may need to stay in a hotel overnight and return in the morning to complete the job. When there are no cranes to service, technicians generally perform routine maintenance and repair work at refineries from 7:00 a.m. to 3:30 p.m. On occasion, technicians travel out of town for training courses. The company provides technicians with vehicles they may use for both work and personal purposes.

2. The Three Scenarios Evaluated

The company provided the following three scenarios and asked multiple questions concerning the compensability of travel time in each:

Scenario 1: A technician travels by plane from his or her home state to New Orleans on a Sunday for a training class beginning at 8:00 a.m. on Monday at the corporate office. The class generally lasts Monday through Friday. The technician travels home on Friday after class is over, or, occasionally on Saturday when Friday flights are not available.

Scenario 2: A technician travels from home to his or her home office to get a job itinerary and then travels to the customer location. The travel time from home to the office varies depending on where the technician lives and can range from 15 minutes to one hour or more. All of this travel is in an assigned company vehicle.

Scenario 3: Hourly technicians drive from home to multiple different customer locations on any given day.

3. General Legal Principles

Before addressing the scenarios, the DOL described basic legal principles under the FLSA, which requires employers to pay employees for their work. It observed that the FLSA defines “employ” as including “to suffer or permit to

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work,” but does not explicitly define what constitutes “work.” After the FLSA was first construed in 1946 in a manner that provoked a flood of litigation, Congress responded by passing the Portal-to-Portal Act of 1947, 29 U.S.C. § 251-262, to provide that employers do not need to compensate employees for: (1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which an employee is employed to perform, and (2) activities which are preliminary or post preliminary to said principal activity or activities, which occur either prior to the time on any particular work day at which such employee commences, or subsequent to the time on any particular work day at which he ceases, such principal activity or activities.

a. Commute Time vs. Travel During The Day

These standards make clear that compensable work time generally does not include time spent commuting to or from work. For example, the regulations in 29 C.F.R. § 785.35 clarify that normal travel from home to work is not work time, regardless of whether an employee works at a fixed location or at different job sites. Unlike ordinary commute time, however, travel from job site to job site during the work day must be counted as hours worked under 29 C.F.R. § 785.38.

b. Out-Of-Town Travel On Overnight Trips

At times employers require that employees travel away from their home communities overnight. In these circumstances, the regulations provide that travel away from home is clearly work time when it cuts across the employee’s work day. The employee is simply substituting travel for other duties. Yet, as an enforcement policy, the DOL “will not consider as work time that time spent in travel away from home outside of regular working hours as a passenger on an airplane, train, boat, bus, or automobile.

4. Opinions

The DOL applied these principles to each of the scenarios outlined.

a. Scenario 1

Scenario 1 addresses the compensability of travel time for technicians who take a flight on Sunday for training that begins on Monday at 8:00 a.m. These technicians return home on Friday after the training concludes, but occasionally travel home on Saturday if earlier flights are not available.

(1) Travel During Overnight Trips

The opinion noted that such travel away from the employee’s home community “is clearly work time when it cuts across the employee’s regular work day.” And, the DOL does “not consider as work time that time spent in travel away from home outside of regular working hours as a passenger on an airplane, train, boat, bus or automobile.” The central issue raised in Scenario 1, however, is how to determine what travel time is compensable when there is no regular work day.

The DOL identified different methods that an employer may use to reasonably ascertain an employee’s normal work hours for purposes of determining compensable travel time. This includes a review of the employee’s time records during the most recent month of employment or negotiating with employees and agreeing to a reasonable amount of time or timeframe in which travel outside of the employee’s home communities is compensable.

(2) Travel From A Training Site To Hotel

The opinion also reviewed the compensability of travel time for an employee’s commute between a training site and the hotel in which he or she spends the night. The opinion remarked that when an employee is temporarily working at a fixed remote location, “generally, the travel time from the hotel to the work site and back would be considered ordinary home-to-work travel, and, as such, need not be compensated.”

b. Scenarios 2 And 3

Scenarios 2 and 3 deal largely with ordinary commutes to and from work. In

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Scenario 2, hourly technicians travel from their homes to the office to get job itineraries before traveling to the customer location. The commute time to and from home may vary, and technicians ordinarily use a company vehicle. In Scenario 3, technicians may “drive from home to multiple different customer locations on any given day.”

(1) Travel Between Job Sites

The opinion confirms that compensable work time generally does not include time spent commuting between home and work, even when the employee works at different job sites. In contrast, travel between job sites after arriving at work is compensable. Thus, travel from job site to job site during the work day must be counted as hours worked. Where an employee is required to report at a meeting place to receive instructions or to perform other work there, or to pick up and to carry tools, the travel from the designated place to the work place is part of the day’s work, and must be counted as hours worked regardless of contract, custom, or practice.

(2) Use Of Company Vehicle

The opinion examined whether the use of a company vehicle makes otherwise non-compensable travel time compensable. It reiterated that travel between job sites during the work day is already compensable. With respect to commuting time, however, the law specifies that use of a company-provided vehicle does not, alone, make an ordinary commute compensable, provided that “the use of such vehicle for travel is within the normal commuting area for the employer’s business or establishment and the use of the employer’s vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.” Such agreements need not be written and may be based on established industry or employer practices.

(3) Work Performed While Traveling

The opinion explained that any work that an employee is required to perform while traveling must be counted as hours worked, regardless of whether it falls within the regular work day. The

DOL assumed that employees were not performing any other work during travel time.

SPECIAL REST BREAKS REQUIRED FOR MEDICAL REASONS ARE NOT COMPENSABLE UNDER FLSA

In FLSA2018-19 (April 12, 2018), the U.S. Department of Labor (“DOL”) addressed medical certifications under the Family and Medical Leave Act (“FMLA”) stating that employees needed 15-minute breaks every hour due to their own continuing serious health conditions. Taking such breaks means that, in an eight-hour shift, these employees will perform only six hours of work. The DOL assumed the employees were eligible for protected leave under the FMLA, that they had a serious health condition, and the recurring 15-minute breaks constitute protected leave under the FMLA.

1. General Legal Principles

a. Rest Period Standards

Short rest breaks up to 20 minutes in length “primarily benefit the employer” by promoting the efficiency of the employee and are ordinarily compensable. However, the DOL explained that in limited circumstances short rest breaks primarily benefit the employee and therefore are not compensable. For example, the court in Spiteri v. AT&T Holdings, Inc., 40 F.Supp.3d 869 (E.D. Mich. 2014), confirmed that an employee was not entitled to compensation for frequent “accommodation breaks” to accommodate the employee’s back pain.

b. FMLA Leave

The DOL also noted the relevance of the FMLA, which provides eligible employees with up to 12 workweeks of job-protected leave each year for certain family and medical conditions. An employee may take FMLA in periods of weeks, days, hours, or even less than an hour.

2. Opinions

The DOL reiterated that rest breaks of up to 20 minutes in length are generally compensable because they predominantly benefit the employer.

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However, the specific FMLA-protected breaks described in the letter differ significantly from ordinary rest breaks commonly provided to employees. Instead, the 15-minute breaks at issue are required eight times per day and solely due to the needs of the employee’s serious health condition as required under the FMLA. Because they are given to accommodate the employee’s serious health condition, they predominantly benefit the employee and are non-compensable.

The DOL also found that the text of the FMLA further confirms that employees are not entitled to compensation for the FMLA-protected breaks. Indeed, the FMLA expressly provides that FMLA-protected leave may be unpaid.

The opinion emphasized that employees who take FMLA-protected breaks must receive as many compensable rest breaks as their co-workers receive. For example, if an employer generally allows all of its employees to take two paid 15-minute rest breaks during an a eight-hour shift, an employee needing 15-minute rest breaks every hour due to a serious health condition should likewise receive compensation for two 15-minute rest breaks during such a shift. The opinion found it immaterial whether employees drink coffee, smoke, or go to the restroom, etc. during the rest breaks.

EMPLOYEE’S FAILURE TO BRING CASE TO TRIAL WITHIN FIVE YEARS RESULTS IN DISMISSAL OF CASE

California law requires that an action must be brought to trial within five years after it is commenced. Failure to do so can result in the dismissal of the action. In fact, under Section 583.360 of the Code of Civil Procedure, dismissal of an action that has not reached trial at the end of five years is mandatory.

A California Court of Appeal applied this statute in the April 16, 2018 decision in Tanguilig v. Neiman Marcus Group, Inc., ____ Cal. App. 5th ____ (2018). An employee brought suit against her former employer, Neiman Marcus Group, Inc., alleging a combination of individual and class claims for wrongful termination in violation of public

policy and multiple wage-hour transgressions under the California Labor Code. Those claims included meal period, rest period, overtime, minimum wage, and final pay claims, as well as claims based on the Private Attorneys General Act (“PAGA”). The action was filed in August 2017, but the trial court gave the plaintiff the “benefit of the doubt” that the commencement of the five-year period began December 19, 2007, when she filed her first amended complaint. The statutory five-year period thus expired on December 19, 2012. Because the case was not brought to trial in time, the trial court granted the employer’s motion to dismiss the suit under Section 583.310.

The plaintiff appealed the decision, arguing primarily that the trial court erred in failing to toll the five-year clock under California law. She argued, in part, that the period should be tolled for the period during which an order compelling her co-plaintiff to arbitration was in effect. She also challenged the trial court’s award of costs to Neiman Marcus as the prevailing party. The court of appeal found no merit to any of the employee’s theories. It therefore affirmed the dismissal of the lawsuit.

DOL ISSUES CLARIFICATION OF TIP CREDIT RULES BASED ON FLSA AMENDMENTS.

On April 6, 2018, the U.S. Department of Labor (“DOL”) issued Field Assistance Bulletin (“FAB”) No. 2018-3 concerning the “Amendment to FLSA Section 3(m) Included in Consolidated Appropriations Act, 2018.” The FAB provides guidance regarding the Wage and Hour Division’s (“WHD”) enforcement of tip credit rules under the Fair Labor Standards Act (“FLSA”) after Congress amended the FLSA in 2018 in Public Law No. 115-141 Div. S., Tit. 12, § 1201.

1. The FLSA’s Tip Rules

The FLSA prohibits employers from keeping tips received by their employees, regardless whether the employer takes a tip credit under 29 U.S.C. § 203(m). It also provides that portions of the WHD’s regulations codified at 29 C.F.R. §§ 531.52, 531.54, and 531.59 that barred tip pooling when employers paid tipped employees at least the full FLSA minimum wage

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and do not claim a tip credit shall have no further force or effect.

WHD expects to proceed with rule-making in the near future to fully address the impact of the 2018 amendments. The FAB clarifies that, in the meantime, employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped – such as cooks and dishwashers – to participate in tip pools.

a. Managers And Supervisors

The FLSA prohibits managers and supervisors from participating in tip pools, as it equates such participation with the employers keeping the tips. As an enforcement policy, WHD will use the duties test at 29 C.F.R. § 541.100(a)(2)-(4) to determine whether an employee is a manager or supervisor for purposes of Section 3(m).

b. Enforcement And Penalties

The Act provides enforcement authority to recover all tips unlawfully kept by the employer, in addition to an equal amount in liquidated damages. It further provides the WHD with discretion to impose civil money penalties of up to $1,100 when employers unlawfully keep employee tips. The WHD will follow its normal procedures in assessing such penalties, including by determining whether the violation is repeated or willful. Finally, the WHD announced that its July 20, 2017 non-enforcement policy concerning retention of tips by tipped employees paid the full FLSA minimum wage will not apply to new investigations beginning on or after March 23, 2018. When an investigation covers periods before and after March 23, 2018, and the employee was paid at least the full FLSA minimum wage, violations of Section 3(m) may only be cited if they occurred after March 23, 2018.

2. DOL Fact Sheet

In April 2018, the DOL also issued Fact Sheet #15: “Tipped Employees Under the Fair Labor Standards Act (FLSA)”. The Fact Sheet indicates that the Consolidated Appropriations Act of 2018 vacated the DOL’s 2011 regulations that barred tip pooling when employers do not claim a

tip credit under Section 3(m) of the FLSA. The Fact Sheet addresses tip credits and tip pools. It explains the provisions as follows:

a. Tip Credits

Section 3(m) of the FLSA permits an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage. Thus, the maximum tip credit that an employer can currently claim under the FLSA is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13). Under certain circumstances, an employer may be able to claim an additional overtime tip credit against its overtime obligations. (California employers should note that tip credits are not permissible under California law to meet the state minimum wage.)

b. Tip Pools

The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), bussers, and service bartenders. A valid tip pool may not include employees who do not customarily and regularly receive tips, such as dishwashers, cooks, chefs, and janitors.

The Fact Sheet outlines the requirements employers must satisfy in order to use the tip credit under the FLSA. The requirements include the obligation to provide oral or written notice to tipped employees informing them of the applicable conditions.

It also addresses the retention of tips. The Fact Sheet states that a tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit. The FLSA prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be

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required to turn over his or her tips to the employer.

The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips. The FLSA does not impose a maximum contribution amount or percentage on valid mandatory tip pools. The employer, however, must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for the amount of tips each tipped employee ultimately receives, and may not retain any of the employees’ tips for any other purpose.

c. Compulsory Service Charges

The Fact Sheet explains that a compulsory service charge for service, for example, 15% of the bill, is not a tip. Such charges are part of the employer’s gross receipts. Sums distributed to employees from service charges cannot be counted as tips received, but may be used to satisfy the employer’s minimum wage and overtime obligations under the FLSA. If an employer receives tips in addition to the compulsory service charge, those tips may be considered in determining whether the employee is a tipped employee and in the application of the tipped credit.

d. Credit Cards

Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less their percentage. For example, where a credit card company charges an employer 3% on all sales charged to its credit service, the employer may pay the tipped employee 97% of the tips without violating the FLSA. However, this charge on the tip may not reduce the employee’s wage below the required minimum wage. The amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.

MANUFACTURING EMPLOYER OBTAINS PARTIAL VICTORY ON CLASS CERTIFICATION

Lawsuits are filed every day alleging violations of the California Labor Code. As ALERT readers recognize, these claims are frequently brought as proposed class actions. In Morales v. Leggett & Platt Inc., Case No. 2:15-CV-01911 E.D. Cal. (April 5, 2018), a federal district court recently discussed whether claims filed against a manufacturing company should proceed on a class basis, ultimately concluding that two claims should proceed as a class, and three should not.

1. Background

The employees worked in hourly maintenance and manufacturing positions. In 2015, they filed a lawsuit setting forth numerous purported claims under the Labor Code. After nearly three years of litigation, the employees filed a motion for class certification, asking the court to allow five of these claims to proceed on a class-action basis: (a) time saving, (b) seventh day overtime premiums, (c) automatic deductions for meal periods, (d) missed meal periods, and (e) deductions for uniforms.

2. The Court’s Ruling On Class Certification

The court discussed each of the five claims in turn.

a. Time Shaving

Relating to the time-shaving claim, the court noted the employer had submitted numerous declarations from employees stating that, while they may have clocked in at a certain time each day, they did not necessarily start performing work as soon as they did so. Instead, these individuals confirmed they simply “clock in and then wait for a paid safety meeting to start at the beginning of their shift.” Under these circumstances, the court concluded each employee would need to be asked if they performed any work during periods of “shaved time.” Since this inquiry could not realistically be handled in a single trial, the court denied class certification of the time-shaving claim.

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b. Double Time

Regarding the double time claim, the court noted that as a matter of California law, hourly employees are generally entitled to double time pay when they work over eight hours on the seventh consecutive day of work within a seven-day workweek. Because the court found that it could review existing time and attendance records to determine who worked under such circumstances (and that individual testimony from employees was not necessary), it concluded that a class action should proceed as to the claim.

c. “Auto-Deduct” Meal Periods

The court also agreed that class action treatment was appropriate as to the “auto-deduct” meal period claim. The employer argued that many individuals did, in fact, consistently take 30-minute meal periods each day. Thus, automatically deducting 30 minutes of time was not necessarily improper and the court would need to ask each person the particular days they took a 30-minute meal period, and when they did not. The court acknowledged it “may be difficult” to determine whether “individual employees that received auto-deductions actually received meal periods,” but elected to follow several other courts that allowed such claims to be certified.

d. Late, Short Or Skipped Meal Breaks

Regarding the claim that employees were regularly forced to skip, shorten or delay meal periods, the court found that class action status was not warranted. The evidence demonstrated the employer had implemented and enforced lawful meal period policies. Importantly, the evidence also showed that employees sometimes decided on a voluntary basis to take late or short meal periods, or to forego them altogether. Because “determining whether and why employees may not have taken meal periods is an individualized inquiry,” the court decided class certification should be denied.

e. Uniform Maintenance Costs

Finally, the court declined to certify the employee’s uniform maintenance claim. As a

matter of law, employers are generally obligated to pay for any specialized costs associated with maintaining uniforms they require employees to wear (e.g., dry cleaning, sterilization, etc.). (Note: employers are generally not obligated to pay such costs where the uniform is “wash and wear,” and can simply be laundered with the employee’s regular clothes.) Here, the employer had submitted “undisputed evidence that uniforms were not required at the…” relevant jobsites. Since the uniforms were voluntarily worn, any deductions taken to maintain the uniforms were also voluntary. Therefore, because the plaintiffs “have neither alleged nor produced evidence of any legal violation...,” the court rejected the employees’ request to certify the claim.

3. Lessons Learned

In Morales, the employer defeated the employees’ motion for class certification on three claims and lost on two others. Undoubtedly, it would have preferred to avoid litigation altogether. While it is impossible to guarantee an outcome, experienced wage and hour counsel can often assist employers to avoid or eliminate disfavored, questionable or unlawful practices and, thereby, lessen the chances of litigation.

RIDE-SHARE DRIVERS WERE INDEPENDENT CONTRACTORS

In Razak v. Uber Techs, Inc., 2018 U.S. Dist. LEXIS 61230 (E.D. Pa. April 11, 2018), a federal district court granted summary judgment in favor of Uber. The court found that the drivers failed to meet their burden in proving they were misclassified as independent contractors instead of employees.

1. Background

The drivers worked for the Uber ride-sharing service and provided services through a mobile smartphone application. They brought a potential class action against the mobile smartphone application, UberBLACK, seeking back pay for their work driving passengers.

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2. Summary Judgment Granted In Uber’s Favor

Uber’s principal contention in bringing its motion for summary judgment was that the drivers were not employees as a matter of law, and that their potential class action was vulnerable to dismissal. Uber argued that the drivers were not restricted from working for other companies, paid their own expenses, invested in their own companies, advertised and marketed for their own companies, and used the smartphone application as much or as little as they wanted. The drivers asserted that they were employees because they were extensively controlled by Uber when they were online, exercised stamina rather than managerial skill, and were instructed to drive certain vehicle models.

The court found that there was insufficient evidence of Uber’s control over the drivers to support a finding of employee status. For instance, some of the drivers were business owners who sub-contracted “helpers” to drive for Uber using their vehicles, and they were permitted to work for competing companies. The court was also persuaded that the drivers were completely free to determine their working hours. In sum, the court determined that the drivers had not introduced enough evidence to meet their evidentiary burden and Uber prevailed. (Note that the Razak decision was issued under Pennsylvania law. Query whether the same conclusion would be reached under the “ABC” test announced by the California Supreme Court’s recent decision in Dynamex v. Superior Court, discussed earlier in this edition of the ALERT.)

EMPLOYMENT DISCRIMINATION AND WRONGFUL DISCHARGE

DEVELOPMENTS

EMPLOYERS CANNOT USE PRIOR SALARY ALONE TO JUSTIFY WAGE DIFFERENTIALS BETWEEN MEN AND WOMEN

On April 9, 2018, the Ninth Circuit Court of Appeals issued an extremely significant decision in Rizo v. Yovino, Fresno County Superintendent of

Schools, ___ F.3d ___ (9th Cir. 2018). The Ninth Circuit affirmed the district court’s denial of summary judgment to the employer (Fresno County) on a claim under the federal Equal Pay Act of 1963. In an en banc decision, the court held that prior salary alone or in combination with other factors cannot justify a wage differential between male and female employees.

In reaching this decision, it overruled its own 1982 decision in Kouba v. Allstate Ins. Co., 691 F.3d 873 (9th Cir. 1982). In its new opinion, the court held that an employee’s prior salary does not constitute a “factor other than sex” upon which a wage differential may be defended under the statutory “catchall” exception set forth in 29 U.S.C. § 206(d)(1) of the Equal Pay Act. Rather, the phrase “any other factor other than sex” is limited to legitimate, job-related factors such as a prospective employee’s (1) experience, (2) educational background, (3) ability, or (4) prior job performance. Thus, by relying on prior salary, the court found that the employer failed to set forth an affirmative defense.

Although the decision was unanimous, it included concurring opinions of several judges. One concurring opinion cautioned that the decision went too far in holding that any consideration of prior pay is impermissible under the Equal Pay Act, even when it is assessed with other job-related factors. Another judge observed that the majority failed to follow Supreme Court precedent, unnecessarily ignored the realities of business, and, in doing so, might hinder rather than promote equal pay for equal work. It is possible that the employer will seek review by the U.S. Supreme Court. Further, California employers should remember that the California equal pay rules afford employees greater protections than the federal law. For example, effective January 1, 2018, California Labor Code Section 432.3 prohibits employers from seeking salary history information about a job applicant or relying on an applicant’s salary history information as a factor in determining whether to offer employment or what salary to offer.

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1. The Court’s View Of The Equal Pay Act

The Ninth Circuit’s majority opinion was written issued by Circuit Judge Reinhardt, who recently passed away. He began the opinion with the following:

“The Equal Pay Act stands for a principle as simple as it is just: men and women should receive equal pay for equal work regardless of sex. The question before us is also simple: can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history, and purpose of the Equal Pay Act, the answer is clear: No. ***

Prior to this decision, our law was unclear whether an employer could consider prior salary, either alone or in combination with other factors, when setting its employees’ salaries. We took this case en banc in order to clarify the law, and we now hold that prior salary alone or in combination with other factors cannot justify a wage differential. To hold otherwise – to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum – would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands.”

2. Background

In applying these principles, the court explained that the employer, the Fresno County Office of Education, does not dispute that it pays Aileen Rizo less than comparable male employees for the same work. However, it argues that this wage differential is lawful under the Equal Pay Act, which prohibits employers from discriminating between employees on the basis of sex by paying wages to employees at a rate less than the rate at which they pay wages to employees of the

opposite sex for equal work on jobs the performance of which requires equal skill, effort and responsibility and which are performed under similar working conditions. The law contains exceptions where such payment is made pursuant to (1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production, or (4) “a differential based on any other factor other than sex.”

3. The Exception For A “Factor Other Than Sex” Did Not Offer A Safe Harbor

Fresno County argued that the wage differential at issue was based on the fourth exception – the catchall exception: a “factor other than sex.” It argued that an employee’s prior salary can constitute a “factor other than sex” within the meaning of the catch all exception. The court found that this would allow the County to defend a sex-based salary differential on the basis of the very sex-based salary differentials the Equal Pay Act was designed to cure. It concluded that prior salary does not constitute a “factor other than sex.” It remarked that, “allowing prior salary to justify a wage differential perpetuates this message, entrenching in salary systems an obvious means of discrimination – the very discrimination that the Act was designed to prohibit and rectify.” It therefore affirmed the district court’s denial of summary judgment to the County and returned the case to the district court for proceedings consistent with its opinion.

90-DAY PERIOD TO FILE TITLE VII CASE BEGINS WHEN RIGHT-TO-SUE NOTICE IS GIVEN

Under Title VII, an individual wishing to bring a claim against an employer must exhaust administrative remedies by filing a charge with the Equal Employment Opportunity Commission (“EEOC”) or a qualifying state agency and receiving a right-to-sue notice. In Scott v. Gino Morena Enterprises, LLC, 2018 DJ 3783, _____ F.3d _____ (April 27, 2018), the Ninth Circuit Court of Appeals addressed this requirement. The primary issue before it was whether the 90-day period for filing a civil action begins when the individual becomes eligible to

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receive a right-to-sue notice from the EEOC or when the person is actually given a right-to-sue notice.

1. The Lawsuit

The appeal arose after an employer was granted summary judgment against its former employee, Scott. The employee sued, alleging sexual harassment and retaliation under state law. The parties stipulated to the dismissal of Scott’s state law claims and the filing of an amended complaint asserting claims under Title VII of the Civil Rights Act of 1964. The district court concluded that Scott’s Title VII claims were time-barred and that she failed to meet her burden of establishing a basis for equitable tolling.

2. The Ninth Circuit Decision

The Ninth Circuit reversed. It held that the 90-day period referenced in 42 U.S.C. § 2000e-5(f)(1) begins when the aggrieved person is given notice of the right to sue by the EEOC. It also held that Scott’s Title VII claims could be based on alleged acts occurring after she filed her first administrative charge only to the extent such acts were part of a single unlawful employment practice.

a. The 90-Day Rule

The Ninth Circuit found reversal of the first portion of district court’s decision straightforward. The district court determined that the 90-day clock for Scott to file suit began when she became eligible to receive a right-to-sue notice, rather than when she received her right-to-sue notice from the EEOC.

b. The Continuing Violation Doctrine

The Ninth Circuit then tackled the standard that a Title VII plaintiff may not base a claim on conduct occurring outside the statutory time period for filing a charge (i.e., 300 days before the charge is filed). However, an exception applies under the “continuing violations doctrine, which allows acts that fall outside the statutory time period to be actionable. The application of that doctrine depends on the nature of the plaintiff’s claim. For

example, a hostile work environment claim is composed of a series of separate acts that collectively constitute one unlawful employment practice. Consequently, the entire time period of the hostile environment may be considered by a court for the purposes of determining liability so long as at least one “act contributing to the claim occurs within the filing period.” In other situations, each discrete discriminatory act starts a new clock for filing charges alleging that act.

To the extent Scott’s claims are based on discrete acts occurring after the filing of her first Department of Fair Employment & Housing (“DFEH”) charge, e.g., retaliation for filing the first administrative charge, the district court did not err in granting summary judgment to the employer. On the other hand, the Ninth Circuit concluded that Scott may base her Title VII claim on the employer’s alleged acts occurring after she filed her first DFEH charge to the extent she can show such acts are part of a single hostile work environment claim.

3. Summary

The Ninth Circuit held that the 90-day period for an aggrieved person to file a civil action under Title VII begins when the person is given notice of the right to sue from the EEOC, not when the person becomes eligible to receive such notice. It also held that Scott’s Title VII claims may be based on alleged acts occurring after she filed her first DFEH charge only to the extent such acts are part of a single unlawful employment practice. It affirmed the district court’s grant of summary judgment to the employer only as to Scott’s claims that were based on discrete discriminatory or retaliatory acts occurring after Scott filed her first DFEH charge.

HIGHLY-COMPENSATED EXECUTIVE MUST ARBITRATE EMPLOYMENT-RELATED CLAIMS AGAINST TECHNOLOGY COMPANY

In Pompliano v. Snap, Inc., Case. No. CV 17-3664 (April 11, 2018), an extremely short-tenured executive was required to abide by the arbitration agreement he signed at the beginning of his employment. During negotiations relating to the job, the employee successfully negotiated a

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salary of $240,000, as well as stock options worth $3.5 million. The employee thereafter worked for “three tension-filled weeks” before being fired. According to the employee, he was wrongfully terminated because he blew the whistle about false statements company executives were making about “key performance metrics” in advance of an initial public stock offering.

Interestingly, the employee initially submitted his wrongful termination claims to arbitration as required by the terms of his agreement. However, after arbitrating for approximately six months, the employee filed a lawsuit against the employer in state court that set forth additional employment-related claims. A few months after that, the employee filed yet another employment-related lawsuit against the company – this time, in federal court. In response, the company asked the federal court to send the new claims to arbitration.

The employee argued the agreement he signed was “unconscionable,” chiefly contending that he was an unsophisticated, non-lawyer, who did not truly understand what he signed. The court soundly rejected this contention. The employee was a seasoned business professional who successfully negotiated a healthy salary and stock benefit plan by himself. Thus, it was unreasonable for the employee to claim he was not able to understand what he signed. Accordingly, the court enforced the parties’ agreement and sent the matter to arbitration.

TERMINATION OF EMPLOYEE FOR CONDUCT TOWARDS CUSTOMER DID NOT SUPPORT HARASSMENT OR RETALIATION CLAIMS

Many employers, HR officials, and employment attorneys anticipate a significant increase in the number of sexual harassment claims due to the #MeToo movement. The changes to Internal Revenue Code Section 164(q) regarding the inability to take deductions for settlements of sexual harassment or abuse claims that include confidentiality features are also expected to impact the area. However, the actual legal standards applied under state and federal laws to determine whether conduct constitutes unlawful harassment or retaliation have not

changed. The standards were recently applied in the April 3, 2018 decision in Hales vs. Casey’s Marketing Co., ___ F.3d ___ (8th Cir. 2018). The court examined a sexual harassment and retaliation claim filed by an 18-year-old employee against her former employer. The trial court excluded evidence of the employee’s previous sexual assaults and granted summary judgment to the employer under Title VII. The court of appeal affirmed.

1. Background

Hales was employed at Casey’s Summer Street store for a brief period from April 9, 2013 to May 31, 2013. At approximately 1:44 am on May 29, a male customer entered the store where she worked. The customer purchased some items and began speaking with Hales, asking her if she had a boyfriend and if she worked at the location often. He also made comments about where he lived, where he worked, what kind of car he drove, and that there was a dashboard camera on his car. Using a sexually suggestive tone, he told her that he liked to film things. After the customer had been in the store for about 10 minutes, two police officers entered the store. Although Hales stated that she felt annoyed and uncomfortable with the customer, she did not feel threatened and did not express any concern to the police.

After the officers left the store, Hales went outside to smoke a cigarette in an attempt to elude the customer. She asked a coworker to keep an eye on her because a customer had been “hitting on her.” The customer followed her outside and blocked the entrance to the store. After he made a statement that she found sexual, Hales told the customer to “back off.” The customer replied, “What are you going to do about it?” In response, Hales extended her cigarette towards the customer in an attempt to make him move away. The customer instead stepped towards her and burned his left arm on her cigarette. The customer recoiled and then reentered the store, followed by the employee. She did not call the police or report the incident to a supervisor.

When Hales reported for her next shift on May 31, 2013, a manager asked her if “anything out of the ordinary had happened“ while working at the store. Hales acknowledged that she had

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burned a customer with her cigarette, but stated that she did so in order to defend herself. The manager then terminated her.

Hales later filed a complaint with the Iowa Civil Rights Commission, arguing that her termination was based on discrimination and in retaliation for resisting sexual harassment. The complaint was cross-filed with the Equal Employment Opportunity Commission.

2. The District Court Decision

After Hales filed a lawsuit, Casey’s moved to dismiss her claim. Hales sought to introduce evidence that she had previously been sexually assaulted, along with testimony from her counselor that she had been undergoing therapy in order to learn to have a voice and be “empowered“ to resist sexual assaults. The court granted Casey‘s motion to exclude her expert opinion and testimony, concluding that evidence of her previous sexual assaults was not relevant to her hostile work environment and retaliation claims.

The district court determined that the hostile work environment claim failed as a matter of law because Hales did not show “severe or pervasive harassment affecting a term or condition of her employment.” It also determined that her retaliation claim failed both procedurally and on the merits because she was not engaged in activity protected under Title VII.

3. The Court Of Appeal Decision

a. The Elements Of A Sexual Harassment Claim

The employee argued that her hostile work environment claim should have survived summary judgment because the customer’s conduct was severe enough to affect a term or condition of her employment and because the employer failed to take sufficient action despite its having knowledge of the customer’s behavior. In evaluating her claim, the Eighth Circuit stated that to prevail on a hostile working environment claim, the plaintiff must prove the following five elements: (1) that she is a member of a protected group; (2) that she was the subject of unwelcome sexual harassment; (3) that a causal nexus existed between the harassment

and protected group status; (4) that harassment affected a term, condition, or privilege of employment; and (5) that her employer knew or should have known of the harassment and failed to take prompt and effective remedial action. In order to show that the harassment affected a term or condition of employment, the conduct must be sufficiently severe or pervasive to create an environment that a reasonable person would find hostile or abusive and that actually altered the conditions of the victim’s employment.

b. The Effect Of An Isolated Incident

The employee argued that an isolated incident may be sufficient to establish an effect on an employee’s work conditions. The court disagreed. While this might be true in an extremely serious incident, the incident in this case does not meet the demanding standard set forth in the case law. Although Hales claimed she felt threatened, she left the store alone to have a cigarette, followed the customer back into the store, and did not report the incident to the police or to a supervisor. In light of the circumstances, she failed to make a sufficient showing that the customers conduct was so severe or pervasive as to affect a term, condition, or privilege of her employment.

c. The Employer Did Not Have The Requisite Knowledge To Support A Claim

The court also determined that Hales failed to show that the employer knew of the customers harassing conduct but failed to take remedial action. An employer’s liability turns on whether the employer was aware of the conduct and whether it took appropriate action to remedy the circumstances in a timely and appropriate manner. When her employer received the first complaint from the other female employees, it took immediate action, telling the customer that he would be banned from the store and that the police would be called if his behavior continued. Moreover, because the employer first learned about the incident between Hales and the customer when the customer himself reported it to the employer, it could not be held responsible for failing to take remedial action concerning an incident about which it had no knowledge. Thus,

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the employee failed to meet the requirements of establishing a hostile working environment claim.

MEDICAL LEAVE PERIOD MAY BE DEDUCTED FROM EMPLOYEE’S PROBATIONARY PERIOD UNDER THE FEHA

The California Fair Employment and Housing Act (“FEHA”) protects disabled applicants and employees from discrimination. It also prohibits employers from failing to make reasonable accommodations for the known physical or mental disability of an employee or from failing to engage in a timely, good faith, interactive process with the employee to determine effective reasonable accommodations. In the case described below, the employer violated these rules when it terminated a probationary employee who was temporarily disabled.

1. The Probationary Employee Was Entitled To Accommodations

In Hernandez v. Rancho Santiago Community College District, _____ Cal.App.5th _____ (May 3, 2018), a California Court of Appeal concluded that a college district violated the FEHA when it terminated a probationary employee who missed work for surgery resulting from a temporary work-related injury. The trial court determined that the college district had two options to accommodate the employee while she was on probation. It could deduct the time she was not able to work from her one-year probationary period or extend the probationary period by the number of days she was off work. Either accommodation would have given the employee a 12-month probation and the college district 12 months to evaluate her. In addition to failing to accommodate the employee’s temporary total disability, the trial court concluded that the school district failed to engage in the interactive process with her.

2. Background

In affirming the trial court’s judgment, the court of appeal first examined the employee’s failure to make a reasonable accommodation claim. It identified three elements a plaintiff must establish to pursue to a failure to accommodate

action: (a) the plaintiff has a disability covered by the FEHA; (b) the plaintiff is a qualified individual (i.e., he or she can perform the essential functions of the position); and (c) the employer fails to reasonably accommodate the plaintiff’s disability. The college district argued that it accommodated the employee by giving her time off from work for her surgery and recovery; however, it then argued that it, had to terminate her probation when her anniversary date approached because she otherwise would have become a “permanent employee” on her anniversary date.

The court of appeal rejected the argument. It determined that the accommodation could “hardly be considered reasonable when it included the consequence that she would lose her job if she took the time off to undergo surgery.” It stated that a finite leave is not a reasonable accommodation when the leave leads directly to termination of employment because the employee’s performance could not be evaluated while she was on the leave. It agreed with the trial court that the Education Code did not require the college district to either terminate Hernandez’s employment or make her a permanent employee on her anniversary date.

3. Conclusion

The court of appeal concluded that when a probationary employee suffers a temporary total disability requiring absence from work for an extended period of time, that period may be deducted from the employee’s probationary period. In that way, the employer receives the full 12-month period of time in which to evaluate the employee’s performance, and the employee does not lose her job because she suffered a job injury resulting in her temporary total disability. Because the college district could have deducted the extended period of time she was away from work from her probationary period, it would not have incurred an undue hardship to do so.

Finally, the college district failed to engage in a timely, good faith, interactive process with the employee as required by the FEHA. The court described the “interactive process” as an informal process with the employee or the employee’s representative to attempt to identify a reasonable accommodation that will enable the

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employee to perform the job effectively. The evidence indicated that Hernandez was told she could not be fired for taking medical leave, but she was thereafter fired when she took the leave. Based on that record, the court could not conclude the interactive process “was in good faith.” Further, when Hernandez attempted to interact with the college district, she was rebuffed. “Thus, instead of sitting down with the employee and working out an effective accommodation, the district slammed and locked the door.” The court determined that this violated the FEHA.

4. Lessons Learned

This case reiterates several principles that employers are well-advised to remember. It is important that employers understand that the disability discrimination laws afford job applicants and employees broad protections like other laws, they prohibit unlawful discrimination against qualified individuals with physical or mental disabilities. They also require employers to make reasonable accommodations for such individuals. And, unlike most other laws, they require employers to engage in a timely, good faith, interactive process. It is prudent to memorialize the efforts employers make to do so.

EMPLOYEE WAS NOT DISABLED DUE TO INABILITY TO WORK OVERTIME

State and federal law prohibit employers from discriminating against qualified individuals with disabilities. However, not all medical conditions constitute disabilities under the Americans With Disabilities Act (“ADA”) that is precisely what the court found in Hoppman v. Liberty Mutual Insurance Co., ___ F.Supp. ___, 3:17-cv-00402-BR (D. Ore. April 12, 2018). The court granted the employer’s motion for summary judgment on the basis that an employee who could work 40 hours a week, but was unable to work overtime was not disabled under the ADA.

1. The Employer’s Contentions

The employer asserted it was entitled to summary judgment on the ground that the employee did not have a qualifying “disability” and the employer did not have an obligation under

either federal or state law to accommodate an employee’s request for “a work schedule of no more than 40 hours a week.” The employer also claimed it was not required to engage in the interactive process until the employee provided a work release from her doctor. Lastly, the employer argued that the employee did not cooperate in the interactive process by providing such a release. The employee disagreed, contending that she is a qualified individual with a disability and that the employer refused to allow the interactive process to begin in violation of its obligations under both federal and state law.

2. The ADA Standard

The ADA prohibits employers from discriminating against a qualified individual with a disability because of the disability of such individual. The term “discriminate” includes “not making reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, unless the employer can demonstrate that the accommodation would impose an undue hardship.” A plaintiff bears the ultimate burden of establishing that he has been the victim of illegal discrimination based on his disability.”

3. The Employee Failed To Show She Has A Qualifying Disability That Substantially Limits A Major Life Activity

The employer argued that the employee does not have a qualifying disability for purposes of the ADA because she is able to work a 40-hour workweek. It also contended that her inability to work more than 40 hours per week does not mean she is “substantially limited.” The employee countered that her disability is not limited to a 40-hour work restriction.

In examining the ADA, the court stated that an individual is “disabled” if she has “a physical or mental impairment that substantially limits one or more major life activities” or if her employer regards her “as having such an impairment.” A “substantial limitation” is one that “limits the ability of an individual to perform a major life activity as

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compared to most people in the general population.”

On December 7, 2015, the employee requested an accommodation in her job duties under the ADA “due to depression.” In March of 2016, she completed an Activities Questionnaire as part of her claim for disability benefits, stating she suffers from “severe degenerative disc disease – lumbar”. She also stated she experiences “multiple headaches,” which include migraines and results in nausea that “prevent her from engaging in gainful employment.” The court determined that the record only reflects she is limited to working a 40-hour workweek. The issue, therefore, is whether her inability to work overtime (i.e., more than 40 hours per week) constitutes a disability for purposes of the ADA. Even though the Ninth Circuit has not explicitly addressed this issue, other courts have held an employee is not “substantially” limited under the ADA if she “can handle a 40-hour workweek but is incapable of performing overtime due to an impairment.”

The court further observed that the Ninth Circuit has determined a plaintiff must establish that her disability substantially limits her ability to work.

In addition, the Ninth Circuit concluded in Wong v. Regents of University of California, 410 F.3d 1052, 1067 (9th Cir. 2005), “merely having an impairment does not make one disabled for purposes of the ADA.”

The employee’s treating physician indicated in that she was able to return to work limited to eight-hour work days with scheduled breaks. Her doctor did not set out any other limitations and, in fact, testified she considered this a “full duty” release. There was no evidence that any physician limited her work due to depression. The court stated: “Although Plaintiff may have some disabilities, the record on this Motion does not reflect any such disabilities substantially limit her daily activities to the extent that she cannot work a 40-hour work week. As noted, Plaintiff is incapable of performing overtime due to an impairment, but, nevertheless, she is able to perform her regular job duties during an eight-hour day. In fact, Plaintiff testified she is currently employed in a similar position with another

insurance company, has the same health conditions and limitations that she had when she worked for Defendant, and is able to perform the duties of her current job.”

Based on the record, the court granted the employer’s motion for summary judgment and dismissed the employee’s Complaint.

SEVERANCE AGREEMENT BARRED DISCRIMINATION CLAIMS OF LAID OFF EMPLOYEE

Employees who sign severance agreements that release all claims they might have against their employer may be bound by the bargain to which they agreed. That is precisely what occurred in Kennedy v. Columbus Manufacturing, Inc., Case 3:17-cv-03379-EMC (N.D. Cal. April 23, 2018), where the federal district court granted the employer’s motion for summary judgment. The court relied upon a severance agreement signed by a former employee who had been laid off as part of a reduction in force (“RIF”) due to the closure of the employer’s South San Francisco facility. By signing the severance agreement, the plaintiff, Kennedy, agreed to release “any and all claims arising from or related to his employment,” including claims for age and disability discrimination. He received a severance payment of $54,798.04 in exchange for his release.

After signing the severance agreement, Kennedy brought an action against his former employer, Columbus Manufacturing, Inc. and its vice president of human resources, alleging violations of the Americans With Disabilities Act of 1990 (“ADA”) and the Age Discrimination in Employment Act of 1967 (“ADEA”). The court agreed that Kennedy was bound by the terms of the severance agreement and was therefore barred from asserting his claims.

1. Background

Kennedy worked as a quality assurance manager from January 9, 2012 to August 29, 2015. In 2013, he contacted the employer regarding safety concerns and notified it of his workplace injury. He later began working part time

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and took a medical leave. In November 2013, the employer made the decision to close its plant due to a reorganization of its business operations. This resulted in the elimination of Kennedy’s position.

After he rejected several severance offers in 2014 and 2015, he was informed that his employment would be terminated effective October 12, 2015, whether or not he agreed to severance. On October 20, 2015, after eight months of negotiations throughout which he said he consulted one or more attorneys, Kennedy signed the severance agreement that contained a “Release of Claims.” The final agreement advised Kennedy to carefully consider the terms of the agreement and to consult an attorney before signing it. The agreement advised Kennedy that he had 45 days to consider the agreement before signing it, and seven days to revoke it after executing it. Kennedy took 54 days to consider the final agreement, and never attempted to revoke it after signing it. The company then followed his instructions regarding the manner in which he wished the severance amount to be paid.

2. The Release Was Valid And Enforceable

The employer argued that the written release extinguished any obligation that fell within the scope of its terms, including the age and disability discrimination claims Kennedy asserted. Under California law, in order to bring a claim released by a settlement agreement, a plaintiff must rescind the agreement. In order to obtain rescission, Kennedy was required to prove his consent to the severance agreement was obtained through economic duress, undue influence, or that the release was otherwise improper. For example, he could show that his signature was obtained under conditions of fraud, deception, misrepresentation, duress, or undue influence.

Kennedy failed to demonstrate undue influence, economic duress or that he gave his consent as a result of fraud. The court therefore concluded that the severance agreement was valid and enforceable and granted the employer’s motion for summary judgment.

DISCRIMINATION BECAUSE OF EMPLOYEE’S TRANSGENDER OR TRANSITIONING STATUS VIOLATES TITLE VII

In Equal Employment Opportunity Commission v. R.G. & G.R. Harris Funeral Homes, Inc., _____ F.3d _____ (6th Cir. March 7, 2018), the Sixth Circuit Court of Appeals rejected a funeral home’s claim that it did not violate Title VII by requiring an employee, a transgender woman who was “assigned male at birth,” to comply with a sex-specific dress code. The funeral home argued that the dress code equally burdens male and female employees.

The Sixth Circuit sided with the Equal Employment Opportunity Commission (“EEOC”), which represented the employee, Stephens, and reversed the summary judgment granted to the employer by the lower court.

It concluded that discrimination against employees, either because of their failure to conform to sex stereotypes or their transgender and transitioning status, is illegal under Title VII. The facts showed that the funeral home fired the employee because she refused to abide by her employer’s stereotypical conception of her sex. Therefore, the EEOC was entitled to summary judgment as to its unlawful-termination claim.

The Sixth Circuit also rejected the employer’s argument that requiring the funeral home to employ Stephens while she dresses and represents herself as a woman would constitute an unjustified substantial burden on the sincerely held religious beliefs of the owner in violation of the Religious Freedom Restoration Act (“RFRA”). It determined that the RFRA did not provide the funeral home with relief because continuing to employ Stephens would not, as a matter of law, substantially burden the owner and operator’s religious exercise.

THWARTING PREGNANT WOMAN’S JOB APPLICATION MAY VIOLATE FEHA

In Abed v. Western Dental Services, Inc., _____ Cal.App.5th _____ (May 23, 2018), the California Court of Appeal addressed the question of whether a potential employer can be held liable

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under the California Fair Employment and Housing Act (“FEHA”) for thwarting a pregnant woman from applying for a job by falsely telling her that no position is available. The court concluded that it can.

The plaintiff claimed that she was denied a job on account of pregnancy in violation of the FEHA, even though she had not submitted an application. The applicant contended that the trial court wrongly dismissed her FEHA claim. Even though she never applied for a job, she raised a triable issue of material fact as to whether the potential employer intentionally discriminated against her by falsely telling her that no position was available.

The court made it clear that it did not find that the employer committed any type of discrimination. To the contrary, it merely determined that the matter should not have been resolved as a matter of law at the summary judgment phase simply because the pregnant individual never applied for a dental assistant position. She did not claim that it would have been futile to apply for a position, but that the employer caused her not to apply by falsely telling her for discriminatory reasons that no position was available. The court recognized earlier cases supporting the position that a person could not reasonably be expected to apply for a vacancy she was told did not exist. In short, the court concluded that summary adjudication of the FEHA claim against the applicant was not justified solely on the basis that she failed to apply for a position. The court thus reversed the judgment of the trial court and returned the cases for further proceedings.

PROBATIONARY EMPLOYEE LACKED PROPERTY INTEREST IN HIS JOB

In Palm v. Los Angeles Department of Water and Power, __ F.3d __, 2018 WL 2142652 (9th Cir. 2018), the Ninth Circuit recently held that a city employee lacked a protected property interest in his probationary employment as a steam plant maintenance supervisor. Thus, the employee could not maintain a valid constitutional claim predicated on his termination.

1. Background

An employee worked as a steam plant assistant for nearly two decades until he was promoted to supervisor in 2012. As a supervisor, he commenced a six-month probationary period in the new position. He thereafter made several complaints to his immediate supervisor about noncompliance with state and federal health-safety and labor laws. After five months, the employee was given the choice of mandatory resignation or termination from his position as a supervisor, so he returned to the steam plant assistant position. He then brought a claim against his employer for whistleblower retaliation.

2. Dismissal Of Complaint

The trial court dismissed the employee’s complaint, finding that he could not state a due process claim. It also determined that the employee could not state a Fourteenth Amendment claim because he lacked a property interest in his probationary position.

3. Ninth Circuit Confirmed Dismissal

On appeal, the Ninth Circuit agreed with the trial court’s dismissal of the complaint. The employee was required to demonstrate a constitutionally protected property interest in his position. However, the city’s charter indicated that probationary positions held by city employees were not vested with a protected property interest. As a probationary employee, he was foreclosed from bringing his claim under the Fourteenth Amendment.

NEW YORK MAYOR SIGNS ANTI-HARASSMENT ACT INTO LAW

On Wednesday, May 9, 2018, Mayor Bill de Blasio signed into law the Stop Sexual Harassment in NYC Act. In pertinent part, the Act provides as follows:

• Starting immediately, the statute of limitations to file a gender-based harassment claim with the New York City

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Commission on Human Rights (NYCCHR) is extended from one year to three years;

• Starting immediately, all employers, regardless of size, will be subject to the New York City Human Rights Law (“NYCHRL”) prohibition on gender-based harassment;

• Starting immediately, sexual harassment is considered a form of discrimination under the NYCHRL;

• Starting September 6, 2018, all employers must display the NYCCHR’s new anti-sexual harassment poster in a conspicuous place in the workplace and provide the information to employees at the time of hire. (Note: the NYCCHR has yet to publish its new anti-sexual harassment poster); and

• Starting April 1, 2019, all private employers with 15 or more employees (including interns) must conduct annual anti-sexual harassment trainings for all employees and interns, and employers must keep records of such trainings for at least three years.

New York City employers should prepare to alter their practices and policies accordingly.

MISCELLANEOUS DEVELOPMENTS

SEATTLE’S “UBER UNIONIZATION” ORDINANCE IS AGAIN STALLED IN COURT

On December 14, 2015, the City of Seattle enacted a first-of-its-kind ordinance which permitted individuals working as independent contractors for taxicab companies and ride-sharing apps, such as Uber and Lyft, to collectively bargain over the terms and conditions of their work. The ordinance is novel because collective bargaining has long been understood to apply solely to labor unions and employees, not to independent contractors.

The regulated companies, as well as the U.S. Chamber of Commerce, immediately filed a lawsuit asking the court to declare the ordinance unenforceable on several grounds. In Chamber of Commerce v. City of Seattle, Case. No. 17-35640 (May 11, 2018), the Ninth Circuit Court of Appeals recently wrestled with two of those grounds: (1) an alleged violation of the federal Sherman Antitrust Act; and (2) “preemption” under the National Labor Relations Act (“NLRA”).

1. The Antitrust Claim

Under the Sherman Act, individuals and companies are generally forbidden from engaging in price fixing. Thus, for example, two competing businesses cannot collude to set a minimum price they will charge the market for a given product or service. Generally speaking, these rules do not apply to employees. As such, employees are permitted to unionize and collectively bargain for wages and other employment terms and conditions.

In the lawsuit, the Chamber of Commerce argued that because the drivers in question were independent contractors and not employees, the Sherman Act’s prohibition against collusion applied. In effect, the Chamber asserted the ordinance would permit drivers to “price-fix” with each other to decide what level of compensation they would accept from the relevant businesses. Whereas the lower court that initially heard the case rejected this argument, the Ninth Circuit determined it may have merit. Thus, without deciding the issue, the Ninth Circuit sent the case back to the lower court for further proceedings.

2. NLRA Preemption

The Chamber also argued that the ordinance should be “preempted” (i.e., found unenforceable) under the NLRA. The U.S. Supreme Court has long held that state or local laws which attempt to regulate matters governed by the NLRA are unenforceable if they interfere with the “scheme of regulation” set forth by the statute. The idea is that Congress established a comprehensive means of regulating the relationship between employees, employers and unions in the NLRA, that it intended this mechanism to apply to the country as a whole, and

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that states and cities should generally not be permitted to enact their own laws on the topic.

In the Chamber’s lawsuit, it argued that Seattle’s ordinance was preempted because it impermissibly sought to regulate matters governed by the NLRA. The Ninth Circuit soundly rejected this argument. The NLRA, it explained, only governs relations with employees, not independent contractors. Since all of the workers in question were classified as independent contractors, the NLRA simply did not apply. The court noted it might reach a different result if, for example, a later court or administrative agency finds that Seattle’s Uber or Lyft drivers should be classified as employees under the law. However, since no finding has yet occurred, the NLRA preemption argument must be rejected.

3. What Happens Next?

Notably, the Seattle ordinance has never actually gone into effect. The courts handling the issue have consistently enjoined or stayed its enforcement pending a resolution of the Chamber’s lawsuit. Presumably, this stay will remain in place now that the case has been sent back to the lower court.

TRIBAL GAMING ESTABLISHMENTS MAY BE REGULATED BY NLRB

In Casino Pauma v. NLRB, 2018 U.S. LEXIS 10553 (9th Cir. April 26, 2018), the Ninth Circuit Court of Appeals determined that employers and gaming establishments on tribal land may be subject to the provisions of the National Labor Relations Act (“NLRA”). This represents a new development in the field of traditional labor law.

1. Background

A casino was located on tribal land in Pauma Valley, California. The casino employed 462 employees, the vast majority of which were not members of any Native American tribe. In 2013, UNITE HERE (the “Union”) began an organizing drive at the casino. Nine casino employees distributed leaflets to customers at the casino’s front entrance. The employees were

instructed to stop or they would be subject to discipline. Later, three employees were provided a disciplinary warning for distributing Union flyers. Several complaints were filed by the National Labor Relations Board (“NLRB”) against the casino concerning the leafletting incidents, charging that they constituted unfair labor practices.

2. Decision By Administrative Law Judge

The complaints against the casino were consolidated and an Administrative Law Judge (“ALJ”) presided over a three-day trial. The ALJ held that the casino violated the NLRA by committing unfair labor practices in attempting to stop union literature distribution in guest areas by the casino’s front entrance and non-working areas near the employee time clock. The NLRB affirmed the ALJ’s decision.

3. Petition To Enforce NLRB’s Order Granted By Ninth Circuit

The NLRB petitioned the court for enforcement of its order and the casino filed its own petition. The casino argued that the NLRB misinterpreted the NLRA and principles of federal Indian law by adjudicating unfair labor charges against it in light of its status as a tribally-owned business operating on tribal land. Specifically, the NLRA does not apply to federal and state governments, but is silent as to Indian tribes.

The court disagreed with the casino, concluding that although the NLRA is ambiguous as to its application to tribal employers, the NLRB’s determination that such employers were covered by the NLRA was a “reasonably defensible” interpretation. It found that governing law required the court to defer to the NLRB’s interpretation if it was rational and consistent with the statute, and the court found that it was.

NLRB BACK TO FIVE MEMBER COMPOSITION

On April 11, 2018, former management lawyer John Ring was confirmed via a 50-48 party-line vote to serve on the five-member National Labor Relations Board (“Board”). Ring will replace Chairman Marvin Kaplan, another member of the

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Board’s Republican majority appointed by President Trump. Ring’s confirmation sets the stage for undoing many Obama-era rulings that have sparked controversy within the employer community. However, not all Obama-era cases may be fair game.

1. Board Considering Rulemaking To Address Joint Employer Standard

On May 9, 2018, the Board announced it is considering rulemaking to address the standard for determining joint-employer status under the National Labor Relations Act (“NLRA”). This decision stems from the Board’s recent reversal of its decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 14, 2017). In Hy-Brand, the Board overruled the controversial joint-employer standard that was announced in Browning-Ferris Indus. of California v. Sanitary Truck Drivers, 362 NLRB No. 186 (2015) (“BFI”), which held an employer could be considered a joint employer as long as it exercised “indirect control” over working conditions or had “reserved authority” to do so. By overruling BFI, the Board returned to the joint-employer standard that existed prior to BFI, which required an employer to exercise direct and actual control to be considered a joint employer. The Hy-Brand decision, however, was vacated on February 26, 2018 for an alleged conflict of interest due to Board Member Emanuel’s participation in the decision. (This was addressed in the March 2018 issue of the ALERT.)

Now, in obvious response to the rescission of the Hy-Brand decision, the Board has announced it will consider rulemaking on the joint-employer standard and that the internal process necessary to do so is already underway. Because any proposed rule will only require approval by a majority of the five-member Board, the Republican-appointed majority will likely be successful in overturning the BFI standard again, albeit through a far slower and less-traveled process. The current Board is likewise continuing to monitor new cases that present an opportunity to revisit the joint-employer standard.

2. Many Other Obama-Era Rulings Likely Will Be Overruled

While the fate of BFI remains uncertain, a number of other Obama-era rulings may change, including the following:

• Concerted activity for mutual aid and protection – cases finding conduct was for mutual aid and protection where only one employee had an immediate stake in the outcome (e.g., individual sexual harassment claims), as well as cases finding no loss of protection of the NLRA despite obscene, vulgar, or other highly inappropriate conduct. Fresh & Easy Neighborhood Market, 361 NLRB No. 12 (2014); Pier Sixty, LLC, 362 NLRB No. 59 (2015).

• Employment agreements/workplace rules found unlawful in union and union-free workplaces – cases where the outcome would be different under the Board’s Republican Majority’s test in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), including cases prohibiting “disrespectful conduct” and other “general civility” rules, rules prohibiting use of employer trademarks and logos, rules protecting confidential and proprietary information, and rules requiring confidentiality during workplace investigations. Casino San Pablo, 361 NLRB No. 148 (2014); Boch Honda, 362 NLRB No. 83 (2015); Banner Estrella Medical Center, 362 NLRB No. 137 (2015).

• Employees’ presumptive right to use their employer’s email system to engage in union and other protected concerted activities in union and union-free workplaces. Purple Communications, 361 NLRB No. 126 (2014).

• NLRB findings in conflict with other statutory requirements such as Title VII. Cooper Tire & Rubber Co., 363 NLRB No. 194 (2016); Pier Sixty, LLC, 362 NLRB No. 59 (2015).

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• Off-duty employees’ right to access company property to engage in union activities and other protected concerted activities. Capital Medical Center, 364 NLRB No. 69 (2016); Piedmont Gardens, 360 NLRB No. 100 (2014).

• A successor employer’s obligations to hire a predecessor’s workforce and/or bargain with the union that represented its employees. GVS Properties, 362 NLRB No. 194 (2015); Creative Vision Resources, 364 NLRB No. 91 (2016); Nexeo Solutions, 364 NLRB No. 44 (2016).

• Employers’ requirement to offer to bargain with the union before imposing discretionary discipline where the union and the employer have not executed an initial collective bargaining agreement. Total Security, 364 NLRB No. 106 (2016).

• Duty to provide witness statements to unions. Piedmont Gardens, 362 NLRB No. 139 (2015), overruling Anheuser-Busch, 237 NLRB 982 (1984).

• Requirement that dues check-off obligation survives expiration of the collective bargaining agreement. Piedmont Gardens, 362 NLRB No. 139 (2015); Lincoln Lutheran of Racine, 362 NLRB No. 188 (2015).

The Board’s 3-2 Republican majority will likely lead to overturning some of the above sweeping decisions of the Obama Board. However, reexamination of these precedents will be highly dependent on the specific case and the composition of the Board deciding the case. While cases overturning prior Board precedent are typically decided by a full five-member panel, many cases are decided by a three-member panel. The ALERT will continue to notify readers of developments in this area.

NEW PUBLICATIONS

NEW EDITION OF WAGE AND HOUR MANUAL PUBLISHED IN ELECTRONIC AND PRINT FORMATS

The 2018 edition of the Wage and Hour Manual for California Employers, Twenty-First Edition, is now available. The Manual is authored by Attorney Richard J. Simmons, a partner with the law firm of Sheppard, Mullin, Richter & Hampton LLP. The new edition is more than 1000 pages, and provides a detailed analysis of the California and federal wage and hour laws.

Simmons' Wage and Hour Manual for California Employers is generally regarded as the best resource available on the California and federal wage and hour requirements. The new edition examines new case law developments, including the Supreme Court's Augustus v. ABM and Brinker Restaurant decisions, new statutory rules, the amendments to state law adopted by the California Industrial Welfare Commission ("IWC"), the AB 60 changes, and amendments to the Fair Labor Standards Act ("FLSA"), including the overtime exemption regulations. It also addresses numerous other judicial developments. This includes a review of new cases involving the white collar exemptions, the "salary basis" rules, commissions, standards on "unconscionability of contracts," and deductions from wages, as well as many other topics.

The book also discusses the state and federal wage and hour laws that govern employers, meal and rest period requirements, the federal laws regulating government contractors, independent contractor and joint employment relationships, the legal standards regulating the maximum number of hours employees can work, the employment of minors, minimum wage obligations, tipped employee rules, hours worked, overtime standards, flexible work arrangements, exemptions, the payment of wages, record-keeping rules, tort liability issues, posting obligations, uniforms, medical examinations, enforcement standards, and a variety of additional topics.

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This book is available from Castle Publications, Ltd for only $149.00, plus tax and shipping ($172.16 total) for the print format and $199.00, plus tax per copy ($217.91 total) for the electronic format. Orders can be placed directly with Castle Publications, Ltd. at (213) 455-7617 or online at www.castlepublications.com.

NEW EDITION OF BOOK OF HUMAN RESOURCES FORMS PUBLISHED

Castle Publications, Ltd. is pleased to announce that Attorney Richard J. Simmons has completed the new 2018 edition of the Book of Human Resources Forms (Fifth Edition) in both print and electronic formats. The publication was written on the premise that every employer and human resources representative must administer a wide variety of personnel practices at every stage of the employment relationship.

In order to act consistently and legally, standardized procedures and practices are essential. As a result, a critical need existed for personnel forms that guide each HR, personnel, payroll and employee relations representative through the maze of governing rules and regulations. The need for standardized forms begins with the hiring, recruitment and application process and continues through the time an employee terminates.

1. Over 240 Forms

The new publication is more than 450 pages long. It presents over 240 personnel and HR forms that will greatly simplify many personnel administration tasks. These include a vast collection of forms that guide those responsible for personnel administration through the entire employment relationship, from its inception to its conclusion, and beyond.

The sample forms and letters include updated job applications incorporating “Ban the Box” restrictions, offer letters, counseling forms, performance improvement plans, meal period forms, cell phone reimbursement forms, expense reimbursement forms, time card certifications, disciplinary actions plans, layoff notices, leave of absence forms, change of status forms, and many

more. This publication is an essential resource for every employer. Any one of the forms will pay for the entire cost of the publication.

2. Chapters Cover Entire Employment Relationship

The chapters of the book include forms in the following general areas: (a) pre-hire forms, (b) new-hire and orientation forms, (c) payroll practice forms, (d) employee benefit forms, (e) personnel action and status forms, (f) leave of absence and time-off forms, (g) disciplinary action and grievance forms, (h) education assistance and training forms, (i) separation and post separation forms, and (j) government forms.

3. Electronic Publication Also Available

The electronic version of this book includes all the features of our other electronic publications plus a zip file containing all of the non-government forms in Word format. This allows for easy-customization of the forms to add a company logo, employee data, or other company information.

This book is now available from Castle Publications, Ltd for only $149.00, plus tax and shipping ($172.16 total) for the print format and $179.00, plus tax per copy ($196.01 total) for the electronic format. Orders can be placed directly with Castle Publications, Ltd. at (213) 455-7617 or online at www.castlepublications.com.

16TH EDITION OF SEXUAL HARASSMENT TRAINING MANUAL NOW AVAILABLE

The California Fair Employment and Housing Council (FEHC) issued new regulations requiring significant revisions to policies prohibiting harassment, discrimination and retaliation. Among other changes, they address investigations, confidentiality, complaints, anti-retaliation standards, translation requirements, and the need to update policies to cover all characteristics protected by California law. This includes the new protections regarding gender identity, gender expression and genetic information. The FEHC also modified its regulations regarding the two-

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hour training and tracking rules and the negative effects of "abusive conduct."

These developments under state law do not present employers' only concerns. The U.S. Supreme Court recently decided a landmark case that addresses workplace harassment and redefines the term "supervisor" under Title VII.

These and other developments are reflected in the new edition of the Sexual Harassment Training and Prevention Manual (16th Edition), authored by Attorney Richard J. Simmons of the law firm of Sheppard, Mullin, Richter & Hampton LLP. It is designed to assist employers to train employees regarding the critical issues associated with unlawful harassment discrimination and retaliation. This includes training top management employees, managers, supervisors, and rank-and-file employees.

The publication has been updated to address California's new regulations, the requirements of AB 1825 (the California law imposing supervisor training obligations), the impact of the U.S. Supreme Court and California Supreme Court decisions, and the statutory changes to the Fair Employment and Housing Act.

1. The Publication's Valuable Content

The publication is written for HR officials, executives, managers, employers, attorneys, and supervisors. In order to achieve its objective of providing tools to train all employees, the publication includes updated training outlines, a "new hire and orientation checklist," sample quizzes for managers and hourly employees, sample Information Sheets regarding unlawful harassment, sample policies against unlawful harassment, sample promise of compliance with policies against unlawful harassment, and training scenarios that can be used as educational tools.

2. Use As A Training Tool

The publication provides a review of the laws regarding sexual harassment in a form that can be presented to all managers, supervisors and employees. It also discusses the objectives of training and how to structure training programs,

whether they are conducted by internal HR officials or outside experts. It examines what constitutes sexual harassment vs. legally permissible behavior, discusses the types of conduct that can cause harassment claims, and reviews the responsibilities that employers have for their supervisors. It also reviews the personal liability standards that exist.

3. Investigation Tips And Practical Pointers

The publication addresses the method of developing and implementing policies prohibiting unlawful harassment, provides insights regarding the judicial perspective on the subject, including the U.S. and California Supreme Court decisions, identifies the manner of receiving and investigating complaints of harassment internally, and offers additional practical ideas. It includes information regarding the manner in which discipline should be imposed where violations of anti-harassment policies occur. It also includes the new Workplace Harassment Guide issued by the DFEH offering guidelines on how to handle sexual harassment investigations.

4. Availability

The 2018 training and prevention manual is now available from Castle Publications, Ltd. for only $89.00, plus tax and shipping ($104.46 total) for the print format and $119.00, plus tax per copy ($130.31 total) for the electronic format. Orders can be placed directly with Castle Publications, Ltd. at (213) 455-7617 or online at www.castlepublications.com.

2018 EDITION OF WRONGFUL DISCHARGE MANUAL PUBLISHED

We are pleased to announce that Richard Simmons has completed a new edition of his well-known publication, the Wrongful Discharge, Staff Reduction And Employment Practices Manual (Fifth Edition). The new edition of the book, which exceeds 750 pages, provides a comprehensive review of the state and federal laws governing disciplinary action, terminations, layoffs, and staff reductions.

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1. Sample Forms

The new edition of the book contains more than 50 pages of sample employment forms for review, including an offer of employment letter, integrated at-will statements, performance evaluations, disciplinary action forms, exit interview forms and checklists, employee reference policies, layoff notices, grievance submission forms, and a request to inspect personnel files.

2. Arbitration And ADR Covered

The book examines alternative dispute resolution ("ADR") mechanisms, including mediation and arbitration. The chapter on this subject includes a review of recent cases, including California Supreme Court and U.S. Supreme Court decisions regarding the enforceability of employment arbitration agreements.

3. The Book Addresses A Full Range Of Topics

Other chapters of the book address significant issues that make it an essential desk reference for HR officials, supervisors, attorneys and others responsible for disciplinary matters, layoffs, and important personnel decisions. Among the subjects covered are: (1) the nature and origin of the employment at-will rule, (2) protections afforded union employees, (3) state and federal laws regulating disciplinary action, (4) contractual limitations on disciplinary actions, (5) judicially-recognized limitations on disciplinary actions, (6) the three branches of the wrongful discharge doctrine in California, (7) emotional distress claims, (8) defamation claims, (9) conspiracy claims, (10) invasion of privacy claims, (11) negligent hiring, retention and supervision standards, (12) retaliation, (13) constructive discharge, (14) noncompetition rules, (15) standards used to evaluate and administer disciplinary action, (16) good documentation practices, (17) investigations, (18) practical guidelines for avoiding unfair dismissal claims, (19) supervisor training, (20) the use of termination letters, (21) post-termination actions and procedures, (22) the use of severance agreements and releases, (23) the role of

unemployment insurance proceedings, (24) performance evaluation and appraisal systems, (25) the use of interim evaluations, (26) mass layoffs and business closings, (27) the role of personnel policies and employee handbooks, (28) grievance procedures, (29) employee polygraph rules, (30) remedies and defenses, (31) the after-acquired evidence doctrine, and numerous other subjects.

This book is now available from Castle Publications, Ltd for only $149.00, plus tax and shipping ($172.16 total) for the print format and $199.00, plus tax per copy ($217.91 total) for the electronic format. Orders can be placed directly with Castle Publications, Ltd. at (213) 455-7617 or online at www.castlepublications.com.

LEAVES OF ABSENCE AND TIME OFF FROM WORK MANUAL UPDATED FOR 2018

In his new edition of the Leaves of Absence and Time Off From Work Manual (Eighteenth Edition), Attorney Richard J. Simmons of Sheppard, Mullin, Richter & Hampton LLP addresses the California and federal laws that regulate leaves of absence and time off from work. The publication provides an overview of the key laws in the area, examines which employers are subject to those laws, and describes their requirements, including the new California amendments that took effect on January 1, 2017.

This publication delves into the complicated issues that surface due to the overlapping obligations that exist where two or more laws intersect. This includes the Family and Medical Leave laws, the American With Disabilities Act ("ADA"), pregnancy disability leaves, and the rules applicable to occupational disabilities. The publication provides checklists that employers can utilize to determine which laws regulate leaves and whether employees qualify for leaves or extensions.

The Manual provides readers a number of helpful appendices and forms. Among others, they include the new DLSE notice for victims of domestic violence, a sample leave designation form, FMLA and CFRA notices, a sample leave of

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absence request form, reproduction of the CFRA, a checklist to evaluate time off requests, and the California pregnancy disability leave regulations.

The publication is more than 210 pages in length. It can be ordered directly from Castle Publications, Ltd. for only $89.00, plus tax and shipping ($104.46 total) for the print format and $119.00, plus tax per copy ($130.31 total) for the electronic format.

NEW EDITION OF CALIFORNIA’S SICK PAY OBLIGATIONS

Attorney Richard J. Simmons’ new publication reviews the obligations imposed on employers under California’s sick pay law. The legislation requires virtually all California employers to comply with a series of new obligations. These obligations include the provision of paid sick leave to employees who meet simple eligibility rules and allow the accrual of paid sick leave at minimum rates set by the Legislature. The law applies to full-time, part-time, temporary and seasonal employees.

Employers must also include additional information in their Wage Theft Prevention Act notices and comply with new posting, record-keeping and reporting rules that will affect information listed on pay stubs.

The fourth edition of California’s Sick Pay Obligations – The Healthy Workplaces, Healthy Families Act (over 140 pages) can be ordered directly from Castle Publications, Ltd. for only $89.00, plus tax and shipping ($104.46 total) for the print format and $119.00, plus tax per copy ($130.31 total) for the electronic format.

2018 SEMINAR SCHEDULE

WAGE-HOUR, EMPLOYMENT DISCRIMINATION, WRONGFUL DISCHARGE, FAMILY LEAVE LAWS, AND EMPLOYEE HANDBOOK SEMINARS

Castle Publications, Ltd. is pleased to announce that it has scheduled full-day labor relations seminars for employers on three separate subjects that will be conducted in Los Angeles, Orange County, and in the Pasadena area. The seminars will feature Richard J. Simmons and other attorneys of Sheppard, Mullin, Richter & Hampton LLP and are highly recommended. They will cover some of the most important and timely issues that affect all California employers.

The Wage and Hour Laws Seminars will be held in Orange County on August 14, 2018, in the Pasadena area on August 21, 2018, and in Los Angeles on September 20, 2018. They will address the new analysis for independent contractors (ABC test), sick pay, AB 60, the new rulings and regulations of the state and federal government agencies, and the recent changes to the California overtime, exemption, meal and rest period, and flexible schedule rules. These seminars will feature the 2018 edition of the Wage and Hour Manual for California Employers by Attorney Richard J. Simmons, which exceeds 990 pages.

The Employment Discrimination and Personnel Relations Laws Seminars will cover the numerous changes to the California discrimination laws and will also include a detailed segment on avoiding wrongful discharge liability. They will be held in Orange County on August 15, 2018, and in the Pasadena area on August 22, 2018. They will feature the eleventh edition of the Employment Discrimination and EEO Practice Manual for California Employers by Attorney Richard J. Simmons, which exceeds 820 pages.

The Employee Handbook and Personnel Policies Seminars will be held in the Pasadena area on August 23, 2018, and in Orange County on September 12, 2018. These programs will

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include numerous topics including segments on the new family rights laws, social media policies, COBRA, California’s sick leave statute, make-up time policies, workplace security and violence protection, domestic partner rules, and drug and alcohol testing issues. They will feature the fourteenth edition of the Employee Handbook and Personnel Policies Manual, by Attorney Richard J. Simmons. This edition of the book is over 770 pages in length and contains more than 450 sample policies.

For more information or reservations, please call Castle Publications, Ltd. at (213) 455-7617 or visit www.castlepublications.com.

PUBLICATIONS NOW AVAILABLE ELECTRONICALLY

Castle Publications, Ltd. is pleased to

announce that many of its publications are available electronically. This allows our readers to have 24/7 access to the publications via the Castle Publications eReader application or through a web reader. Some of the features supported by the electronic format include: the ability to quickly find resources by searching within a publication, the ability to add personal notes and access them anytime, and the ability to highlight in multiple colors and tag highlights with editable categories.

For more information, please call Castle Publications, Ltd. at (213) 455-7617 or visit www.castlepublications.com.

ALERT RENEWAL

ALERT subscribers are reminded that this

issue (Volume 36, Number 6) is the last issue of Volume 36 of the ALERT. Renewal forms should be completed and sent soon to Castle Publications, Ltd. To avoid any interruption in service. ALERT binders can also be ordered. Those who subscribe to Volume 37 will automatically receive a complimentary index to the six issues contained in Volume 36. The authors of the ALERT will continue to strive to make it a

useful and informative source of information for all subscribers.

ABOUT THE ALERT

The ALERT is a publication of Castle

Publications, Ltd., and is published bi-monthly. Subscriptions are available in hard copy or electronic format for $115.00 per volume (six issues) and are payable in advance. Single issues are available for $25.00 each. For more information, please call Castle Publications, Ltd. at (213) 455-7617 or visit our website at www.castlepublications.com.

The ALERT is intended to apprise readers of noteworthy developments involving labor and employment laws affecting or possibly affecting California employers. Its contents are based upon recent statutes and decisions, but should not be viewed as legal advice or legal opinions of any kind whatsoever.

The articles contained in the ALERT represent interpretations by its authors and may be affected by various developments, including judicial and administrative appeals, legislative activity, and conflicting judicial authority. Accordingly, employers and other readers are advised to consult their own legal counsel with respect to any of the issues, statutes, decisions, or matters discussed in the ALERT, and should rely on the advice of their counsel and not on the ALERT when making or implementing personnel-related decisions.

EDITORIAL STAFF

Senior Editor and Author Richard J. Simmons Partner Sheppard, Mullin, Richter & Hampton LLP

Author Matthew Sonne Partner Sheppard, Mullin, Richter & Hampton LLP

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40

Author Daniel McQueen Partner Sheppard, Mullin, Richter & Hampton LLP

ORDER FORM

CALIFORNIA LABOR AND EMPLOYMENT

ALERT NEWSLETTER By Richard J. Simmons, Matthew M. Sonne & Daniel McQueen, Attorneys with Sheppard, Mullin, Richter & Hampton LLP, L.A.

A Tool For

California Employers To

Stay On The Cutting Edge

o Please enroll me in the hard copy ALERT subscription for the six issues of Volume 37 (Vol. 37 begins with the July 2018 issue), plus my 3-ring binder, for only $130 (includes tax and shipping).

o Please enroll me in the hard copy ALERT subscription of Volume 37 (but do not include the binder) for only $115. o Please enroll me in the electronic ALERT subscription of Volume 37 for only $115. (Additional subscribers from your company can receive

the ALERT electronically for only $55 each.)o Volume 36 of the ALERT (6 issues and index) is available for only $75 — SAVE $40.o Please send me Volume(s) 32__, 33__, 34__, 35__($55 each).o Single issues of the ALERT are available for only $25 each. o 3-ring binder (holds 3 volumes) is available for only $16.90.o Check Enclosed o Credit Card

PLEASE MAIL THIS FORM AND CHECK MADE PAYABLE TO CASTLE PUBLICATIONS, LTD TO:Castle Publications, Ltd., 333 South Hope Street, 43rd Floor, Los Angeles, California 90071

For More Information Call: (213) 455-7617 | Fax: (213) 443-2921 | www.castlepublications.com

The ALERT NEWSLETTER provides brief, concise and understandable summaries of significant developments. It is published six times a year.

The ALERT reviews and analyzes significant cases in California state and federal courts, important new statutes, regulations and laws, and key developments at the administrative level, including the EEOC, the FEHC, the Labor Commission, the Wage and Hour Division and the NLRB. Among the subjects covered are:

Covers Newest

Developments

• Wage-Hour Matters• Employment Contracts• National Labor Relations Act• EEO Developments• Workers’ Compensation

• Recent Court Cases• Labor Code Rules• Workplace Violence and OSHA• Personnel Practices and Handbooks• Benefit Matters

The Alert is written by attorneys who are experts in their fields. It is the perfect resource to help individuals stay on the cutting edge of their professions. Its subscribers include:

• Personnel Directors• Controllers and Payroll Personnel• Accounting Representatives

• Management Consultants• Owners and Benefit Managers• Enforcement Agencies

— See Sample Table Of Contents On Reverse Side —

ALERTThe California Labor and Employment

NEWSLETTER

• California has the strictest Labor and Personnel Laws in the country!

• Published every two months...this publication keeps you informed.

• The ALERT assists employers to identify and avoid common pitfalls and stay on top of new laws, decisions, and regulations.

• The ALERT can protect your company from substantial liabilities.

• The ALERT NEWSLETTER provides an up-to-date analysis of important developments in California and Federal Laws concerning personnel, employment and benefit law matters.

• This publication is the living supplement to Richard J. Simmons’ Wage and Hour, Employment Discrimination, Employee Handbook and Personnel Policies and Wrongful Discharge, Staff Reduction and Employment Practices Manuals.

• The ALERT has been a reliable resource to stay abreast of California and federal law developments for over 30 years.

• Wrongful Termination• EEO, FEHC and DFEH Matters• Family Leaves• Immigration Rules• Newest Laws

• Human Resource Officials• Compensation Managers• Corporate Counsel

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