For anyone who missed it, on Monday, March 14th the “Opportunity to Work Ordinance” (the “Ordinance”) went into effect in San Jose. The Ordinance, which was approved by voters on November 8, 2016, requires employers to offer additional hours to existing part-time employees before hiring externally, either directly or through a temporary staffing agency. Employers must offer the additional hours to employees who have the skills and experience to perform the work. Whether or not an existing employee has the requisite skill and experience is a determination left to the employer – modified only by the requirement that the employer act in good faith and with reasonable judgment. Further, an employer need not offer an existing employee additional hours if doing so would require the employer to compensate the existing employee at time-and-a-half or any other premium rate under the law or a collective bargaining agreement. READ MORE
Posts by: Andrew Livingston
From the time of its enactment, the California Private Attorneys General Act of 2004 (“PAGA”) has been a thorn in the side of employers. For example, the California Supreme Court insists PAGA actions are not class actions, but that hasn’t stopped aggrieved employees from seeking class-wide discovery. And because PAGA permits employees to seek penalties for unconventional causes of action previously off-limits to private plaintiffs (such as the California Wage Order’s suitable seating requirement), employers must grapple with new uncertainties.
But one aspect of PAGA that provides some relief to employers is the requirement that plaintiffs exhaust administrative remedies before filing a lawsuit. To satisfy this this requirement, a plaintiff is required to send a notice to her employer and the Labor Workforce Development Agency (“LWDA”) setting forth the “specific provisions” of the Labor Code allegedly violated and explaining the “facts and theories to support the alleged violation” and then wait 65 days before filing suit. This notice requirement has two purposes: (1) to give the LWDA sufficient information to determine whether the alleged violation justifies an investigation and/ or citation and (2) to put the employer on notice so that it may voluntarily cure the alleged violation. Oftentimes, however, plaintiffs’ notice letters are deficient because they fail to include sufficient facts and theories to inform the employer or the LWDA of the nature of the claims. In such cases, plaintiffs have failed to exhaust administrative remedies.
Judge Gonzalo Curiel’s recent decision in Gunn v. Family Dollar Stores, Inc., Case No.: 3:14-cv-1916-GPC-BGS (S.D. Cal. Dec. 2, 2016), reminds us of the standard that notice letters must meet. Plaintiff Gunn’s notice letter advised the LWDA of his intent to file a PAGA action for violations of Wage Order 7-2001, Section 14, and “[s]pecifically . . . allege[d] that Family Dollar failed to provide suitable seats to Plaintiff and other current and former employees when the nature of their work reasonably permits the use of seats, in violation of California Labor Code section 1198 and Wage Order 7-2001, section 14.” Judge Curiel held that such an allegation was insufficient to meet PAGA’s standards. As he noted, plaintiffs must detail the “facts and theories” supporting their alleged violations. But here, the plaintiff’s allegations simply parroted the language of the underlying regulation, amounting to nothing more than a “string of legal conclusions” devoid of any of the facts or theories required by the Labor Code. The court rejected the plaintiff’s contention that facts could be implied by his allegations (i.e., that the class of employees at issue would not include office employees because they have seats).
The most notable aspect of Judge Curiel’s opinion, however, was his denial of the plaintiff’s request for leave to amend. Although the court recognized leave to amend tends to be granted freely, he disagreed that applied to defective PAGA notices. The court stated that “courts have granted PAGA claimants leave to amend only when the plaintiff’s complaint failed to adequately plead exhaustion, not when Plaintiff provided defective notice to the LWDA” (emphasis added). Indeed, granting the plaintiff leave here would tacitly endorse a strategy that precludes the LWDA from receiving the information necessary “to intelligently assess the seriousness of the alleged violation,” thereby frustrating the purpose of PAGA’s statutory notice requirement.
While the unpublished opinion in Gunn will not likely mark a sea change in how courts treat PAGA actions, it is nevertheless a victory for California employers. Those facing suitable seats claims, which are based on a notoriously ambiguous statute, may have the most to gain.
On July 28, 2016, the California Supreme Court added to the ever-changing body of case law regarding classwide arbitration when it held that “no universal rule” exists regarding who (the court or the arbitrator) should decide whether classwide arbitration is permissible under an arbitration agreement, and that this issue must be decided on a case-by-case basis.
The Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), 38 U.S.C. §§ 4301–4335, prohibits discrimination against employees and potential employees based on their military service and imposes certain obligations on employers with respect to employees returning to work after a period of service in the U.S. military. With a large number of service members currently deployed and increased intervention against ISIS potentially enlarging these numbers, employers’ treatment of employees who are members of the military continues to remain an important issue.
The proliferation of paid sick leave (PSL) laws has been well-documented in the last few years. California’s PSL statute has received particular attention in this blog, but Connecticut, Massachusetts, and Oregon have also adopted similar state-wide legislation. And it is not just the states that are rolling out requirements for PSL; dozens of cities and counties have also adopted PSL ordinances (oftentimes in states that already have similar laws in place). Major municipal adopters include New York City, San Francisco, Washington, D.C., Seattle, Newark, and Philadelphia.
A recent federal court decision illustrates how defendants may be able to defeat PAGA claims in California. Brown v. American Airlines, Inc., No. CV 10-8431-AG (PJWx), 2015 WL 6735217 (C.D. Cal. Oct. 5, 2015) is the latest case to dismiss PAGA claims based on the presence of numerous individualized issues that render the case unmanageable. This decision provides hope for employers in the face of rulings by the California Supreme Court and certain federal district courts that PAGA actions need not meet class certification requirements.
The Ninth Circuit recently delivered a setback to defendants seeking to remove cases to federal court under the Class Action Fairness Act (“CAFA”) when it interpreted the statute narrowly to exclude consideration of non-class claims in determining the jurisdictional amount in controversy in Yocupicio v. PAE Grp., LLC, No. 15-55878, 2015 WL 4568722 (9th Cir. 2015).
Employers often encounter challenging questions regarding their duty to accommodate employees who are diagnosed with stress, anxiety, or other mental health conditions that allegedly impact job performance absent accommodation. But what if an employee claims that the stress of working with a particular supervisor is disabling, and that a transfer is the only reasonable accommodation? The California Court of Appeal has provided some measure of clarity, in a recent opinion holding that anxiety and stress claimed by an employee as a result of working under a particular supervisor does not constitute a disability under California’s Fair Employment and Housing Act (FEHA). Higgins-Williams v. Sutter Med. Found., Case No. C073677 (May 26, 2015).
On March 25, 2015, the U.S. Supreme Court issued a decision in Young v. United Parcel Service, Inc., holding that the Pregnancy Discrimination Act (PDA) requires courts to consider the extent to which an employer’s policy treats pregnant workers less favorably than it treats non-pregnant workers similar in their ability or inability to perform their job duties.
The IRS recently announced that severance payments are taxable wages under FICA, and thus employers who seek tax refunds on those payments will be denied. The IRS’s position reflects the United States Supreme Court’s ruling in United States v. Quality Stores, Inc., issued in March of last year.